Contingency planning and crisis management
Financial problems may arise unexpectedly and spread fast. The authorities attempt to prevent financial crises from arising and have a contingency plan so that they are prepared to manage a crisis. An important part of Norges Bank's financial stability work involves preparations for managing a financial crisis.
- Central banks have traditionally had a role as lender of last resort. This means that the central bank can supply extraordinary liquidity to an individual bank or the banking system when demand for liquidity cannot be met from other sources.
More about lender of last resort.
- Central banks have a special responsibility for ensuring that the payment system functions at all times.
More about contingency planning for financial infrastructure
- and for ensuring that the needs of the economy for banknotes and coins can also be met in extraordinary situations.
- The banking crisis in Norway has provided valuable lessons for contingency planning and crisis management. It is the subject of Norges Bank Occasional Papers no. 33, and was also discussed at a conference in Norges Bank in June 2005 on lessons from the banking crisis.
Published