Upon completion of this program, participants will be able to:

• Explain the theoretical and historical basis of the **Lender of Last Resort (LOLR)** function.
• Differentiate between LOLR/ELA, monetary policy, and bank resolution actions.
• Analyze the legal and policy framework required to initiate and govern **Emergency Liquidity Assistance (ELA)**.
• Determine appropriate collateral eligibility, valuation, and haircut policies for ELA lending.
• Manage the delicate balance between providing ELA and the risks of **moral hazard**.
• Develop a comprehensive crisis management and communication strategy for liquidity events.
• Understand the operational and balance sheet mechanics of high-speed liquidity provision.
• Examine the challenges of cross-border LOLR functions and central bank coordination.

• Central Bank Financial Stability and Crisis Management Staff
• Bank Supervisors and Regulatory Authority Personnel
• Commercial Bank Treasury and Balance Sheet Managers
• Legal and Compliance Officers in Central Banking and Finance
• Senior Management involved in Crisis Decision-Making
• Internal Auditors specializing in Crisis Preparedness

ELA case studies (historical and recent), Group negotiation exercise on ELA conditions and collateral, Crisis management team role-playing, Policy framework drafting workshop, Discussions on moral hazard mitigation, Simulation of ELA operational execution.

Unit 1: LOLR Foundations and Policy Framework

• The classic **Bagehot principles** (lend freely, at a penalty rate, against good collateral).
• Defining **Emergency Liquidity Assistance (ELA)** and its exceptional nature.
• Historical case studies demonstrating the effectiveness and failures of LOLR interventions.
• The link between LOLR, Deposit Insurance, and the Resolution Authority.

• The statutory basis and legal authority for ELA provision in various jurisdictions.
• Establishing clear, predefined governance and decision-making protocols for activation.
• The principle of "solvency" determination under extreme market pressure.
• Policy guidelines on the appropriate pricing (penalty rate) and terms for ELA.

Unit 2: Collateral and Risk Mitigation

• Eligibility criteria for ELA collateral, including non-marketable and less-liquid assets.
• Procedures for rapid valuation and application of conservative haircuts.
• The operational challenge of perfecting security interest over ad hoc ELA collateral.
• Managing the risk to the central bank's balance sheet during ELA.

• Defining and quantifying the risk of **moral hazard** associated with ELA.
• Mitigation strategies: setting strict conditions, monitoring, and penalty rates.
• The role of enhanced supervision during the ELA period.
• Exit strategies: the process for the orderly withdrawal of ELA.

Unit 3: Crisis Management and Execution

• Developing high-speed operational procedures for ELA disbursement and collateral processing.
• Coordination with payment system operations to ensure funds settle instantly.
• Staff training and simulation exercises for ELA activation and control.
• Managing the balance sheet mechanics: asset creation and reserve impact.

• The necessity of **confidentiality** in ELA provision and its legal justification.
• Communication strategy for managing market expectations and systemic fear.
• Coordination of public statements with government and supervisory bodies.
• Post-crisis review and communication of ELA events and policy lessons.

Unit 4: Cross-Border and Systemic Issues

• Challenges in providing ELA to institutions with significant cross-border operations.
• The need for international coordination and currency swap arrangements.
• The role of regional central banks (e.g., Eurosystem) in ELA provision.
• Legal and collateral challenges in multinational ELA.