ABSTRACT
This chapter focuses on two related international financial activities: emergency official lending and financial crisis management, and their link with financial standards. Lending and crisis management both aim at restoring foreign currency liquidity in a country under stress. This shall be called the first international lender of last resort (LOLR). The concept of LOLR is integrally related to minimum international standards, crisis management, and other facilities in the international financial architecture. The chapter reviews the practice of domestic LOLR. It evaluates that the role of a putative international LOLR agency in a world where financial crises are sparked by inadequate levels of foreign reserves as well as by foreign debt highly skewed toward short-term maturities and by currency mismatches. The chapter considers the institutional aspects of an international LOLR agency. It also focuses on the international LOLR services from governments to international financial institutions. The crisis manager would co-ordinate the international loan facility.
