The New Function of Central Bank's as the Market Maker of Last Resort: An Evoluation on its Effects and its Results

Abuk Duygulu A., Afşar K. E., Özyiğit M.

AMME IDARESI DERGISI, cilt.49, sa.4, ss.85-115, 2016 (SSCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 49 Sayı: 4
  • Basım Tarihi: 2016
  • Dergi Adı: AMME IDARESI DERGISI
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus, TR DİZİN (ULAKBİM)
  • Sayfa Sayıları: ss.85-115
  • Anahtar Kelimeler: Central banking, market maker of last resort, financial crisis
  • Dokuz Eylül Üniversitesi Adresli: Evet

Özet

This study discusses the central banks' function as market maker of the last resort. The main thesis of the study is that the new function of central banks is one form of intervention which depends on the alterations within the financial system in parallel with the cycles of the capitalist system. The findings are as follow, (i) during crisis periods, financial sector confronts depreciation of financial capital, in regard of the monetary policies of central banks to overcome crisis, monetary expansion is achieved without any inflationary effect; (ii) central banks ensure the stability of financial cooperation and continuity of financial market with policies partially socialising private sector deficits; (iii) the intervention of central banks as the marketmaker of the last resort leads an increase in asset prices which results in a fund transfer to capital holders through postponement of the depreciation period caused by the financial crisis.