See for instance: Willem Buiter and Anne Sibert’s original MMLR proposals from 2007 (Maverecon Buiter's  Blog: Central banks in a time of crisis: a preliminary scorecard  - Willem  ; or The Central Bank as the Market  Maker of last Resort: From lender of last resort to market maker of last resort | CEPR ); Paul Tucker’s 2009 speech (The Repertoire of Official Sector Interventions in the Financial System: Last Resort Lending MarketMaking, and Capital - speech by Paul Tucker | Bank of England); Perry Mehrling’s New Lombard Street (The New Lombard Street | Princeton University Press (bis.org)  ); this 2014 BIS workshop (Re-thinking the lender of last resort  ); Yale’s New Bagehot project, launched in 2017 (The New Bagehot Project | Yale School of Management  ); and the G30 and Brookings post-Covid reports on enhancing US Treasury market resilience (Group of 30 :: Publication Details (group30.org) (brookings.edu)  and Enhancing liquidity of the U.S. Treasury market under stress  ). 6. Which gave Defined Benefit pension schemes leveraged exposure to gilt yields, hedging against upside risks to  Page 14 liability values in a low-interest rate world, while freeing up space for the schemes to hold riskier, higher-yielding but less liquid assets. 7. https://committees.parliament.uk/publications/30129/documents/174330/default/ . In the event, the LDI operations returned revenue of £ to the UK government. But positive returns cannot be guaranteed from such operations, and would not have arisen, e.g.
But what Lorie and I wanted to highlight was that, while Covid itself may have been truly exceptional, the financial market propagation mechanisms that turned that shock into a nascent systemic liquidity crisis reflected more structural trends: an increasing reliance by the real economy on core capital markets rather than banks; constraints on market intermediation capacity; and a range of unresolved vulnerabilities in non-bank firms that played an ever-growing role in those markets. In short, even if nothing as awful as Covid ever happened again, market dysfunction at a scale capable of threatening systemic stability could recur – and in all likelihood, would do so. And central banks needed to be ready to play their part. Our working group did not seek to provide a single definitive ‘playbook’ for such events – the range of potential shocks, and different national market and institutional structures, made that impossible. But it did set out a framework of principles and possible tool choices. [2] And that framework proved invaluable at the Bank of England when, late last year, vulnerabilities in Liability Driven Investment (LDI) funds amplified the impact of an abrupt change in fiscal stance into a selfreinforcing spiral in government bond prices. Long maturity nominal gilt yields rose by 130 basis points in a matter of days – three times the size of any comparable historical move – and we were  Page 3  required to intervene to safeguard financial stability.