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Lender of the Last Resort of the European Central Bank - Essay Example

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The paper 'Lender of the Last Resort of the European Central Bank' focuses on the European central bank which should become the lender of the last result so as to save the euro from weakening. The hypothesis explains that the European central bank should enact monetary policy…
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Lender of the Last Resort of the European Central Bank
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This hypothesis is referred to as a positive hypothesis, from the article; this was rejected at the expense of the null hypothesis. The null hypothesis held because the research findings proved that if the European central bank becomes the lender of the last result it may not safeguard the value of the euro. (Forest &Edward117)
The implications of this study was that the European government should enact strict monetary policies, as well as other measures such as fiscal policies, and trade policies
The implication on the rejection of this hypothesis was on the grounds that, the lender of the last result does not underwrite the financial risk consequences and that the policy is effectively an efficient subsidy system.(Forest &Edward126) Read More
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