Rediscounting under Aggregate Risk with Moral Hazard

Material TypeArticleLanguageEnglish
TitleRediscounting under Aggregate Risk with Moral Hazard Author(S)JAMES T.E. CHAPMAN (Author)
Abstract  Freeman (1999) proposes a model in which discount window lending and open-market operations have different effects. This is important because in most of the literature these policies are indistinguishable. However, Freeman's argument that the central bank should absorb losses associated with default to provide risk sharing stands in stark contrast to the concern that central banks should limit their exposure to credit risk. ...Paginationp 651-674
Journal TitleJournal of Money, Credit, and Banking  
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