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The Lender of Last Resort : Liquidity Provision Versus the Possibility of Bail-out

Eijffinger, Sylvester; Nijskens, R.G.M. - Tilburg University, Center for Economic Research - 2010

banks have provided liquidity and ministries of finance have set up rescue programmes to restore confidence and stability …. Using a model of a systemic bank suffering from liquidity shocks, we find that the unregulated bank keeps too much liquidity … and takes excessive risk compared to the social optimum. A Lender of Last Resort can alleviate the liquidity problem, but …

Persistent link: https://www.econbiz.de/10011092076

The Stability pact Pains : A Forward-Looking Assessment of the Reform Debate

Eijffinger, Sylvester; Buti, M.; Franco, D. - Tilburg University, Center for Economic Research - 2005

The Stability and Growth Pact has been under fire ever since it was born.But is the Pact a flawed fiscal rule?Against established criteria for an ideal fiscal rule, its design and compliance mechanisms show strengths and weaknesses. The latter tend to reflect tradeoffs typical of supra-national...

Persistent link: https://www.econbiz.de/10011092033

A Theory of Central Bank Accountability

Eijffinger, Sylvester; Hoeberichts, M.M.; Schaling, E. - Tilburg University, Center for Economic Research - 1998

This paper develops a theory of central bank accountability. Two aspects of accountability are considered. The first one is transparency of actual monetary policy, the second aspect is the question of who bears final responsibility for monetary policy. Monetary policy is transparent if there is...

Persistent link: https://www.econbiz.de/10011092603

The Impact of the LCR on the Interbank Money Market

Eijffinger, Sylvester; Bonner, C. - Tilburg University, Center for Economic Research - 2012

Abstract: This paper analyses the impact of the Basel 3 Liquidity Coverage Ratio (LCR) on the unsecured interbank money … just above/below their short-term regulatory liquidity requirement pay and charge higher interest rates for unsecured …, being close to the minimum liquidity requirement induces banks to decrease lending volumes. Given the high importance of a …

Persistent link: https://www.econbiz.de/10011092711

The Bond Yield Conundrum : Alternative Hypotheses and the State of the Economy

Eijffinger, Sylvester; Mahieu, Ronald; Raes, Louis - Tilburg University, Center for Economic Research - 2010

We study the bond yield conundrum in a macro-finance framework. Building upon a exible and non-structural macro-finance model, we test the hypothesis that the bond yield conundrum is connected to various sources of uncertainty in the financial markets. Moreover we explicitly test for the role of...

Persistent link: https://www.econbiz.de/10011090282

Monetary Policy Rules, Adverse Selection and Long-Run Financial Risk

Eijffinger, Sylvester; Blommestein, H.J.; Qian, Z. - Tilburg University, Center for Economic Research - 2011

This paper constructs a macro-finance model with two types of borrowers: entrepreneurs who engage in productive activities and gamblers who play in lotteries. It links a central bank's interest rate policy to expected cash ows of both types of borrowers. Via this link we study how the...

Persistent link: https://www.econbiz.de/10011090362

Can the Fed talk the Hind Legs off the Stock Market? (replaces CentER DP 2011-072)

Eijffinger, Sylvester; Mahieu, Ronald; Raes, Louis - Tilburg University, Center for Economic Research - 2012

Abstract: Central banks in fluence financial markets' expectations of its future policy. By providing its stance on the prospects of the economy, rationalizing past decisions or announcing future actions, central banks affect financial markets' forecasts. In bad times monetary policy...

Persistent link: https://www.econbiz.de/10011090377

The Effect of Monetary Policy on Exchange Rates During Currency Crises : The Role of Debt, Institutions and Financial Openness

Eijffinger, Sylvester; Goderis, Benedikt - Tilburg University, Center for Economic Research - 2007

This paper examines the effect of monetary policy on the exchange rate during currency crises. Using data for a number of crisis episodes between 1986 and 2004, we find strong evidence that raising the interest rate: (i) has larger adverse balance sheet effects and is therefore less effective in...

Persistent link: https://www.econbiz.de/10011090390

The Economic Impact of Central Bank Transparency : A Survey

Eijffinger, Sylvester; van der Cruijsen, C.A.B. - Tilburg University, Center for Economic Research - 2007

We provide an up-to-date overview of the literature on the desirabil- ity of central bank transparency from an economic viewpoint. Since the move towards more transparency, a lot of research on its e¤ects has been carried out. First, we show how the theoretical literature has evolved, by...

Persistent link: https://www.econbiz.de/10011090505

Currency Crisis, Monetary Policy and Corporate Balance Sheet Vulnerabilities

Eijffinger, Sylvester; Goderis, Benedikt - Tilburg University, Center for Economic Research - 2005

This paper studies how the exposure of a country's corporate sector to interest rate and exchange rate changes affects the probability of a currency crisis.To analyze this question, we present a model that defines currency crisis as situations in which the costs of maintaining a fixed exchange...

Persistent link: https://www.econbiz.de/10011090665