Central Banks and Different Policies Implemented in Response to the Recent Financial Crisis.
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Rescue cases involving guarantees (contrasted with restructuring cases) during the recent Financial
Crisis, have illustrated the prominent position which the goal of promoting financial stability has
assumed over that of the prevention or limitation of possible distortions of competition which may
arise when granting State aid.
The recent Financial Crisis has also illustrated how the traditional role of central banks has been
extended to incorporate more innovative roles. The reduction of interest rates by central banks to all
time lows – along with other unprecedented actions which have been undertaken by central banks,
as evidenced by the recent Financial Crisis, have been regarded as „extensions of traditional
methods of operation which have resulted in a new territory in which tools have been implemented
in very new ways.“
As well as providing an analysis of how the traditional role of central banks has evolved through the
duration of the Financial Crisis, this paper attempts to highlight how far central banks and
governments should intervene and how far distortions of competition should be permitted during
periods of financial crises
Keywords
HG Finance