Lender of last resortIn public finance, a lender of last resort (LOLR) is the institution in a financial system that acts as the provider of liquidity to a financial institution which finds itself unable to obtain sufficient liquidity in the interbank lending market when other facilities or such sources have been exhausted. It is, in effect, a government guarantee to provide liquidity to financial institutions. Since the beginning of the 20th century, most central banks have been providers of lender of last resort facilities, and their functions usually also include ensuring liquidity in the financial market in general.
Goldman SachsThe Goldman Sachs Group, Inc. (sæks ) is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, Hong Kong, Tokyo, Dallas and Salt Lake City, and additional offices in other international financial centers. Goldman Sachs is the second largest investment bank in the world by revenue and is ranked 55th on the Fortune 500 list of the largest United States corporations by total revenue.
Financial contagionFinancial contagion refers to "the spread of market disturbances - mostly on the downside - from one country to the other, a process observed through co-movements in exchange rates, stock prices, sovereign spreads, and capital flows". Financial contagion can be a potential risk for countries who are trying to integrate their financial system with international financial markets and institutions. It helps explain an economic crisis extending across neighboring countries, or even regions.
Economic recoveryAn economic recovery is the phase of the business cycle following a recession. The overall business outlook for an industry looks optimistic during the economic recovery phase. During the recovery period, the economy goes through a process of economic adaptation and change to new circumstances, including the reasons that caused the recession in the first place, as well as the new policies and regulations enacted by governments and central banks in reaction to the recession.
Mario DraghiMario Draghi (ˈmaːrjo ˈdraːɡi; born 3 September 1947) is an Italian economist, academic, banker, and civil servant who served as prime minister of Italy from 13 February 2021 to 22 October 2022. Prior to his appointment as prime minister, he served as President of the European Central Bank (ECB) between 2011 and 2019. Draghi was also Chair of the Financial Stability Board between 2009 and 2011, and Governor of the Bank of Italy between 2006 and 2011. After a lengthy career as an academic economist in Italy, Draghi worked for the World Bank in Washington, D.
Bank runA bank run or run on the bank occurs when many clients withdraw their money from a bank, because they believe the bank may fail in the near future. In other words, it is when, in a fractional-reserve banking system (where banks normally only keep a small proportion of their assets as cash), numerous customers withdraw cash from deposit accounts with a financial institution at the same time because they believe that the financial institution is, or might become, insolvent.
Global financial systemThe global financial system is the worldwide framework of legal agreements, institutions, and both formal and informal economic action that together facilitate international flows of financial capital for purposes of investment and trade financing. Since emerging in the late 19th century during the first modern wave of economic globalization, its evolution is marked by the establishment of central banks, multilateral treaties, and intergovernmental organizations aimed at improving the transparency, regulation, and effectiveness of international markets.
