Buiter, Willem H.; Rahbari, Ebrahim - C.E.P.R. Discussion Papers - 2012
The paper establishes that sovereigns, like banks, need a lender of last resort (LoLR). In the euro area the ECB, with … its estimated €3.4 trillion non-inflationary loss absorption capacity, is the only credible sovereign LoLR. The ECB … ECB/Eurosystem as a quasi-fiscal actor, we propose that all its credit risk-related losses be jointly and severally …