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Central Banker to the World?

The Board of Governors of the Federal Reserve System has recently released transcripts from its meetings during the 2008 crisis. In these transcripts, it is revealed that the Fed was lending dollars to foreign central banks (ECB, BoJ etc), who in turn were lending those dollars to their domestic institutions. In essence, the Fed was acting as a lender of last resort by providing dollar liquidity to these central banks. In this op-ed, Harold James argues that the Fed's actions have left the IMF marginalised  - it is no longer the international lender of last resort (click here for an article on the IMF's role as an ILLR).

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Bank Runs in Greece

Deposit withdrawals in Greece have been substantial over the past two years.  However, the failure of Greece's politicians to form a coalition government has resulted in deposit withdrawals accelerating - click here and here for more on this.  Depositors are rightly concerned about the exit of Greece from the euro and the subsequent devaluation of their deposits.  The puzzle for me and many others is why are there so many deposits still remaining in the Greek banking system.  One reason is that the Greek banking system is being kept alive by massive injections of money from the ECB.  Will the ECB continue to support the Greek banking system in the face of a mass withdrawal of deposits?  I doubt that there is the political will in Germany for this as the Bundesbank already has a huge exposure to Greece (as well as Spain and Italy) through the ECB's internal Target 2 system.