Central banks played a key role in the unprecedented response to the Covid-19 crisis during the acute phase of the pandemic, working with fiscal authorities to cushion the economic and financial blow and support companies and workers, the Bank for International Settlements (BIS) said in its Annual Economic Report 2020.
In its flagship economic publication, the BIS analyses central banks’ response to the global economic sudden stop, induced in order to prevent a public health disaster. It details how central banks introduced new policy tools, tailored to the specific nature of the stress, to stabilise the financial system and the economy. The Report details how central banks’ role as lenders of last resort has seen another important evolution with a marked shift towards providing funds to the non-bank private sector and, in emerging market economies, towards interventions in domestic currency asset markets.
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