The liquidity consortium bank GmbH with seat in Frankfurt/Main is a special bank. It was created in the year 1974 under the impression of the Herstatt bank crisis by the German Federal Bank as well as further enterprises of the German credit trade.

Structure

Both the German Federal Bank as well as other to it take part bank be to the investment the under private law organize consortium bank take part. On the appropriate investment a high liability to pay an additional amount insists.

Task

The task of the bank wins in connection with the insert safety device at meaning. The support of a bank by the liquidity consortium bank has thereby a shielding character.

It puts the necessary liquidity to a bank in a financial bottleneck situation at the disposal, in order to guarantee the completion their in and foreign exchange. In this way the insolvency is to prevent and thus the loss of the appropriate customer inserts. A condition for the grant of the assistance participates that the supported bank has a perfect soil quality.

Function mode

The liquidity is granted to the emergency suffering bank in form of the transformation qualitatively high-quality non-central bankable change into central bankable changes.

Meaning

Up to the creation to the liquidity consortium bank for the currency area of the German Marks the function of the Lender OF load Resort came to the European economic and monetary union (EWWU). This therefore, since the German Federal Bank taken part in it could accomplish the remedial measures due to its financialeconomical position to theoretically unlimited extent. This possibility was void in the meantime.

Articles in category "Liquidity consortium bank"

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Related Websites

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• Ensuring Financial Stability in the Euro Area - Finance ...
  Liquidity Consortium Bank has been able to identify solvent. institutions to which short-term liquidity assistance should. be provided. ...


• Finance & Development, December 1998 - Ensuring Financial ...
  In practice, thanks to close cooperation with the independent supervisory authority and the Bundesbank, the Liquidity Consortium Bank has been able to ...


• The Hindu Business Line : Bank consortium to raise Rs 870 cr for ...
  Bank consortium to raise Rs 870 cr for Ericsson. Rajalakshmi Menon ... enabling the company to keep its liquidity position unhampered, said an official with ...