Week 7 — Lecture 12, Midterm Review, Reading 6

We're discussing the following for week 7:

Lecture 12: Lender/Dealer of Last Resort

Lecture Notes
In 2008, the shadow banking system collapsed onto the conventional banking system, which was ultimately backstopped by the Fed. A central bank can go from being a lender of last resort (funding liquidity) to a dealer of last resort (market liquidity) in the money markets and even the capital markets.

Midterm Review: Review of Part 1

NOTE: These videos are not available on the BU site or the ColumbiaLearn YouTube playlist, but you can access them directly through the Coursera site or through the playlist that I linked to above.

After a brief overview of the origin of the Fed and and central bank operations during normal times versus crises, Mehrling takes questions from the students on war finance, forward parity and more.

Reading 6: The Economics of the Dealer Function by Jack Treynor

Study Questions

Money and Banking Summer 2021 Reddit Master Thread