Plausibly Exogenous [1249] - Lender of Last Resort (07/04/2023)
LHS Variable
Bank lending
RHS Variable
Lender of last resort (LOLR) policy uncertainty
Source of Exogenous Variation
European Central Bank (ECB) 2011 very Long-Term Refinancing Operation (vLTRO) as a quasi-natural experiment of a sudden reduction in LOLR policy uncertainty: the vLTRO extended the maturity of central bank liquidity from short-term to extraordinarily long three years and, thus, reduced uncertainty regarding the future availability of LOLR funding for a prolonged period of time.
- Jasova, Mendicino, and Supera (2021), “Policy uncertainty, lender of last resort and the real economy”