Ulrich Bindseil
- Published in print:
- 2019
- Published Online:
- July 2020
- ISBN:
- 9780198849995
- eISBN:
- 9780191884429
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198849995.003.0005
- Subject:
- Economics and Finance, Economic History
This chapter recalls the economic rationale of central bank lending to private borrowers (Section 4.1) and argues that the recent literature has often underestimated the importance of such lending by ...
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This chapter recalls the economic rationale of central bank lending to private borrowers (Section 4.1) and argues that the recent literature has often underestimated the importance of such lending by early central banks, without this implying that central banks were really competing with ‘commercial’ banks (Section 4.2). Finally, it illustrates pre-eighteenth-century awareness of the subject by reviewing the literature of the time (Section 4.3). Lending of central banks to private borrowers had a number of advantages relevant as of the first centuries of central banking: (1) providing an option for granular asset diversification and expansion, allowing thereby also to increase the monetary base; (2) generating income with limited risks; (3) improving the availability and pricing of loans for private debtors; (4) anchorizing the central bank in society. Lending to private borrowers took in particular the form of Lombard and discount operations.Less
This chapter recalls the economic rationale of central bank lending to private borrowers (Section 4.1) and argues that the recent literature has often underestimated the importance of such lending by early central banks, without this implying that central banks were really competing with ‘commercial’ banks (Section 4.2). Finally, it illustrates pre-eighteenth-century awareness of the subject by reviewing the literature of the time (Section 4.3). Lending of central banks to private borrowers had a number of advantages relevant as of the first centuries of central banking: (1) providing an option for granular asset diversification and expansion, allowing thereby also to increase the monetary base; (2) generating income with limited risks; (3) improving the availability and pricing of loans for private debtors; (4) anchorizing the central bank in society. Lending to private borrowers took in particular the form of Lombard and discount operations.
Eduardo Borensztein, Kevin Cowan, Barry Eichengreen, and Ugo Panizza (eds)
- Published in print:
- 2008
- Published Online:
- August 2013
- ISBN:
- 9780262026321
- eISBN:
- 9780262269025
- Item type:
- book
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262026321.001.0001
- Subject:
- Economics and Finance, Econometrics
Developing local bond markets is high on the policy agenda of Latin America. Bond markets are an essential component of a well-functioning financial market. Facilitating the efforts of public and ...
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Developing local bond markets is high on the policy agenda of Latin America. Bond markets are an essential component of a well-functioning financial market. Facilitating the efforts of public and private borrowers to issue domestic-currency-denominated, long-term, fixed-rate bonds insulates them from the rollover and balance sheet risks that have been central elements in past financial crises. In addition, a robust bond market is a way for nonfinancial firms to retain their capacity to borrow when the banking system grows reluctant to lend. Latin American bond markets are growing, and may even approach a “big bang”-like surge, although significant challenges remain. This comprehensive examination of the importance of local bond market development in Latin America provides conceptual and comparative assessments, case studies of six countries, surveys of firms and investors, and a cross-country economic analysis of the determinants of bond market development. The book’s case studies of Argentina, Brazil, Chile, Colombia, Mexico, and Uruguay, written by country experts, follow a common methodology, with each offering a history of that country’s bond market development, a comprehensive and unique data set on both private and public bond markets, surveys of firms and investors, and (in many chapters) firm-level analysis. A Web appendix makes available the unique data sets, including results of specially designed surveys of firms and investors participants, used in the book’s studies.Less
Developing local bond markets is high on the policy agenda of Latin America. Bond markets are an essential component of a well-functioning financial market. Facilitating the efforts of public and private borrowers to issue domestic-currency-denominated, long-term, fixed-rate bonds insulates them from the rollover and balance sheet risks that have been central elements in past financial crises. In addition, a robust bond market is a way for nonfinancial firms to retain their capacity to borrow when the banking system grows reluctant to lend. Latin American bond markets are growing, and may even approach a “big bang”-like surge, although significant challenges remain. This comprehensive examination of the importance of local bond market development in Latin America provides conceptual and comparative assessments, case studies of six countries, surveys of firms and investors, and a cross-country economic analysis of the determinants of bond market development. The book’s case studies of Argentina, Brazil, Chile, Colombia, Mexico, and Uruguay, written by country experts, follow a common methodology, with each offering a history of that country’s bond market development, a comprehensive and unique data set on both private and public bond markets, surveys of firms and investors, and (in many chapters) firm-level analysis. A Web appendix makes available the unique data sets, including results of specially designed surveys of firms and investors participants, used in the book’s studies.
