Economics, Econometrics and Finance
3 years ago

Central bank support boosts mutual fund performance during financial crises.

SSRN Electronic Journal
Do Non-Banks Need Access to the Lender of Last Resort? Evidence from Mutual Fund Runs
Johannes Breckenfelder, Marie Hoerova

Paper Summary

Central banks can help non-banks during financial crises. Mutual funds with assets eligible for central bank purchases saw improved performance and reduced outflows after large-scale central bank interventions in March 2020. Banks with more exposure to liquidity crises increased lending to funds following central bank liquidity provision.

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