How Central Banks Wield Emergency Lending Powers

In this episode of Monetary Policy Explained, Lucas and Luna explore the lender-of-last-resort function of central banks, focusing on the Federal Reserve's discount window and the 2023 banking turmoil. They examine how emergency lending tools work in practice, the stigma attached to using them, and what the creation of the Bank Term Funding Program revealed about the limits of traditional facilities. The hosts also discuss the moral hazard tradeoff and how central banks balance stability with market discipline. No ads, just clear economics. #CentralBanks #LenderOfLastResort #DiscountWindow #FederalReserve #EmergencyLending #BankTermFundingProgram #BankingCrisis #MoralHazard #Liquidity #MonetaryPolicy #FinancialStability #Economics #FexingoBusiness #BusinessPodcast #SiliconValleyBank #SignatureBank #LunaAndLucas #PodcastEpisode Keep every episode free: buymeacoffee.com/fexingo