In an article with the Bank for International Settlements, BWC Member Jay Rappaport analyzes how central banks handle emergency liquidity support and the solvency requirements for borrowing institutions. With co-author Rastko Vrbatsky, he explores how solvency is measured, including both balance sheet assessments and forward-looking evaluations of a bank’s financial trajectory. The authors emphasize the importance of coordination among central banks, supervisors, and resolution authorities when managing weak institutions.

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All views expressed by members are their own and not reflective of the views of the Bretton Woods Committee.