Liquidity of Danmarks Nationalbank and the Banks - Part 1

Monetary review, 1st Quarter 2012

Authors Risbjerg, Lars; Sangill, Thomas
Subject Danish Economy
Type Monetary Review  
Year 2012
Published 29 May 2012
Typically, bank liquidity contracts in times of financial crisis. It is a core centralbank task to ensure that banks have access to sufficient liquidity. The article discusses central banks' options of introducing measures to support banks' liquidity when they have difficulties obtaining loans due to dysfunctional money and capital markets. The article also describes the relationship between banks' liquidity and Danmarks Nationalbank's measures, i.e. 3-year loans and expansion of the collateral basis to include the banks' credit claims of good quality.