Research On Lender Of Last Resort System Under The Financial Crisis Based On The Liquidity Risk

This dissertation researches the theory of Lender of Last Resort(LLR).LLR is originated in early 19 century in England and two English economists Thornton and Bagehot should be given a great deal credit for their dedication to the classical LLR. The traditional view think that the lack of liquidity when a single bank and its collapse will affect the stability of the financial system, the Lender of Last Resort(LLR) should appear to provide liquidity support, this is the last lender of the theoretical basis of institutional arrangements. In 2007, after the outbreak of the subprime crisis, on the theory of Lender of Last Resort to re-start attention, scholars have recognized that the traditional concept of the theory of Lender of Last Resort should be fixed.Regardless of the background and impact from the crisis, or the various central banks rescue operations, the theory of Lender of Last Resort (LLR) is no longer applicable. Federal Reserve launched a series of rescue measures, the academic community began to pay attention to exercise its Lender of Last Resort function of the situation. Based on this, I believe that, given the current changing financial environment, should be combined with the subprime crisis lender re-examine the theoretical basis for the final, combing summary Lender of Last Resort system and its implementation mechanisms. This will be the purpose of my research.This study should be of both academic and practical significance. Firstly, To expansion Liquidity risk of the traditional transmission mechanism, thus to study the direction of new ideas. Secondly, Few scholars concern that theory of the Lender of Last Resort on the perspective of liquidity risk. Therefore, this paper focuses on the study after the crisis, Lender of Last Resort (LLR) is how institutional arrangements to ease the liquidity and reduce liquidity risk, settlement of " financial market run" issue, restore the normal operation of financial markets and stabilize the financial system. Based on practical sense, to provide ideas to develop the theory of Lender of Last Resort in our country. The theory of Lender of Last Resort on the theoretical study divorced from reality. On the one hand, specializes in Lender of Last Resort little monograph system; On the other hand, the domestic Lender of Last Resort system of target screening mechanism for rescue, rescue fund raising, etc. The study also can not meet practice.In this paper, the system of Lender of Last Resort includes two aspects:the theory of Lender of Last Resort and the theoretical basis of their specific implementation mechanisms. First, Lender of Last Resort system under the theory of basic research behind new financial crisis, the research focus of this article; Secondly, as its mechanism of implementation, the main target for their assistance, aid standards, operation and functions of the changes proposed by the author Point of view.What makes this study standing out is the following two points:Firstly, to redefine liquidity risk, Sort out the crisis of liquidity risks detailed conduction mechanism, To explore liquidity risk and market based on the subprime mortgage crisis. At the same time, along this thread sort of crisis, market liquidity risk transmission mechanism, revealed the crisis caused by failure of market mechanisms and other phenomena, as the theory Lender of Last Resort under subprime crisis to provide a more appropriate institutional arrangements theoretical basis. Secondly, The crisis different from the traditional bank runs caused by the systemic risk, the traditional theory of Lender of Last Resort does not apply. base on the background of the subprime crisis, the theory of Lender of Last Resort to re-build the theoretical basis of the system and the institutional arrangements. Central banks should be made the traditional "lender" function into "loans" and "investors" and "market maker " role of the Trinity.