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

• Analyze the historical and theoretical basis for the central bank's role as the **Lender of Last Resort (LOLR)**.
• Evaluate the legal mandate, governance structure, and political economy of an **Emergency Liquidity Assistance (ELA)** framework.
• Understand the critical distinction between ELA and standard monetary policy operations (e.g., OMOs).
• Formulate and execute a rigorous, swift **solvency assessment** of an institution requesting ELA.
• Develop detailed operational protocols for the provision, collateralization, pricing, and monitoring of ELA facilities.
• Analyze the complex trade-offs between ELA provision, **moral hazard**, and market discipline.
• Design a robust and flexible framework for eligible **collateral valuation** and haircuts under stressed conditions.
• Examine the protocols for the orderly public communication and eventual withdrawal of ELA.

• Senior Management and Policy Makers involved in Financial Stability and LOLR decisions.
• Heads of Financial Markets, Legal, and Risk Management Departments.
• Banking Supervisors and Resolution Authority Officials.
• Treasury and Operations Staff responsible for ELA collateral and disbursement.
• Internal Audit and Governance Specialists.
• Economists and Researchers focused on Crisis Management.

• Crisis Simulation and Decision-Making Exercises (ELA Request under Time Pressure)
• Group Activities on Drafting ELA Collateral Eligibility and Haircut Policies
• Case Studies on Historical ELA Provision and Policy Debates (e.g., Global Financial Crisis)
• Expert-Led Review of Legal Frameworks for LOLR/ELA
• Discussions on Managing Moral Hazard and Market Communication
• Individual Assignments on Solvency Assessment Protocols for Troubled Institutions

Unit 1: Foundations and Rationale for ELA

• The historical evolution and theoretical justification for the Lender of Last Resort function.
• The Bagehot Principle and its relevance in modern ELA frameworks.
• Distinguishing between systemic and idiosyncratic liquidity crises.
• The ELA mandate: legal basis, required parliamentary/ministerial approval, and delegation of authority.
• The concept of "constructive ambiguity" and its role in crisis management.

Unit 2: Governance, Decision-Making, and Solvency Assessment

• Designing the ELA decision-making body (e.g., ELA Committee) and its composition.
• The critical and urgent process of assessing an institution's **solvency** under stress.
• Information requirements and the role of the supervisory authority in ELA due diligence.
• Legal and political accountability for ELA decisions and potential losses.
• Protocols for cross-border ELA provision and coordination with other central banks.

Unit 3: Operational and Collateral Protocols

• Operational mechanics: speed of disbursement, account settlement, and control mechanisms.
• Collateral eligibility: types, valuation, and legal perfection under crisis conditions.
• The application of **haircuts** and risk-adjusted pricing (penalty rates) for ELA.
• Continuous monitoring of ELA-receiving institution's financial condition and collateral value.
• Exit strategy protocols for the orderly withdrawal and repayment of ELA.

Unit 4: Moral Hazard and Communication Strategy

• Analyzing the risk of **moral hazard** and how ELA framework design can mitigate it.
• The relationship between ELA and the national bank resolution framework.
• Designing a robust **communication strategy** for ELA provision: when to disclose, what to disclose.
• Managing public perception and political scrutiny during a crisis.
• Case studies of ELA deployment in recent financial crises.

Unit 5: ELA and Unconventional Tools

• The intersection of ELA with other central bank liquidity and asset purchase programs.
• The role of ELA in supporting market infrastructures (CCPs) vs. individual institutions.
• Analysis of ELA frameworks in major jurisdictions (e.g., Eurosystem, Federal Reserve, Bank of England).
• Developing a framework for pre-positioning collateral for potential ELA requests.
• Future challenges: ELA in a system dominated by non-bank financial institutions (NBFIs).