The Role of Central Bank as the Lender of Last Resort in the Pandemic Covid-19 Era, a Study of Emergency Liquidity Assistance
- DOI
- 10.2991/assehr.k.211014.054How to use a DOI?
- Keywords
- Emergency Liqudity Assistance, Lender of the Last Resort
- Abstract
The condition of systemic banks can affect the financial system stability when they face liquidity problem, in which an intervention by the government act as prevention and handling of liquidity problems to prevent contagious effect. Meanwhile, in Indonesia, emergency liquidity assistance (ELA) during a crisis was abolished through Law No. 9 year 2016 (PPKSK Law) which causing Bank Indonesia’s lender of last resort (LoLR) facility in dealing with systemic bank liquidity problems only in the form of short-term liquidity loan (PLJP). The purpose of this paper is to track on the condition of ELA in Indonesia which was provided by Bank Indonesia as LoLR post the enactment of Law No. 2 year 2020 during the Covid-19 pandemic era. The research method used is normative juridical, and the data obtained were analyzed using analytical descriptive method. Considering that pandemic has limited economic activity, the government has added the authority of Bank Indonesia to provide special liquidity loans that can be provided to systemic banks if PLJP does not significantly resolve the liquidity problems. In other words, special liquidity loans revive ELA which was abolished through PPKSK Law, so that there is an ELA which includes settlement in the era of the covid-19 pandemic and becomes a backup scheme to avoid ongoing problems from systemic banks.
- Copyright
- © 2021, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Panji Achmad AU - Adi Sulistiyono AU - I Gusti Ayu Ketut Rachmi Handayani PY - 2021 DA - 2021/10/16 TI - The Role of Central Bank as the Lender of Last Resort in the Pandemic Covid-19 Era, a Study of Emergency Liquidity Assistance BT - Proceedings of the International Conference on Environmental and Energy Policy (ICEEP 2021) PB - Atlantis Press SP - 251 EP - 254 SN - 2352-5398 UR - https://doi.org/10.2991/assehr.k.211014.054 DO - 10.2991/assehr.k.211014.054 ID - Achmad2021 ER -