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Navigating liquidity stress: operational readiness for central bank support

The 2023 banking turmoil demonstrated once again the potentially systemic consequences of liquidity stresses and the need for effective central bank lending operations to contain financial instability. For such operations to be a reliable source of contingency funding, banks need to be ready and able to access them. And while central bank liquidity cannot, and should not, prevent a non-viable bank from failing, access to central bank lending operations can give authorities time to prepare a resolution and may help limit broader system-wide stress. […]