Survey on Role of Emergency Funds, Financial Safety—A Perspective View

Whenever a crisis hits, interest in guarantee arrangements rises. The current financial crisis is no exception in that respect. It puts the spotlight on the operation of the financial safety net and provides policy makers with timely opportunity to monitor its performance, with a view to identifying its strengths and weaknesses. This survey paper highlights the needs and ways to accomplish the Emergency cash fund and crisis preventing methodology. A proper financial safety net is necessary to reduce the risk of severe financial crises. Without an appropriate financial safety net, even simple rumours of problems regarding solvency or liquidity of a financial institution have the potential to become self-fulfilling and turn into a full-blown financial crisis. With an appropriate financial safety net in place, confidence tends to be greater and the onset of financial crises less likely than otherwise