When, in the future, the financial system stabilizes and our economies start to recover, central banks will need to decide how best to phase out these extraordinary liquidity actions and credit-market interventions.
In many cases, the rates charged for credit under these facilities have been set to be attractive when markets are disrupted, but uneconomical for users once more-normal functioning returns, and usage should naturally decline as risktaking returns. But, in addition, we will need to decide the appropriate timing of the windingdown of many of the special lending facilities.