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A sufficient and appropriate degree of central bank independence is widely acknowledged to be necessary for the goal of achieving price stability. However, despite the levels of independence claimed to be enjoyed by several central banks, recent events indicate shifts in focus of monetary policy...
Persistent link: https://www.econbiz.de/10011257824
Even though the Congress and the Administration are responsible for determining fiscal policy measures, these measures impact the Fed Reserve's monetary policy decisons. The indirect effect of fiscal policy on the conduct of monetary policy through its influence on the overall economy and the...
Persistent link: https://www.econbiz.de/10011261038
(iv) existence of a fear among the market participants about the future liquidity conditions during the last quarter of …
Persistent link: https://www.econbiz.de/10005014959
Rescue cases involving guarantees (contrasted with restructuring cases) during the recent Financial Crisis, have illustrated the prominent position which the goal of promoting financial stability has assumed over that of the prevention or limitation of possible distortions of competition which...
Persistent link: https://www.econbiz.de/10008693548
could become overly dependent on monetary policy and liquidity sustenance measures provided during deteriorating financial …
Persistent link: https://www.econbiz.de/10008740556
. Declining financial frictions in these over-the-counter (OTC) markets would generate rising liquidity premiums on U.S. T …-Bonds. Meanwhile, the higher liquidity properties of the U.S. T-Bonds would induce recipients of foreign investments, namely emerging … economies, to hold more liquidity, that is U.S. T-Bonds, in equilibrium. The prediction of our model is confirmed by an …
Persistent link: https://www.econbiz.de/10011275137
liquidity developments and asset price movements. Central banks with focus on inflation targeting allowed asset price inflation … from fundamentals. However liquidity conditions are part of fundamental variables and should be taken into consideration as …
Persistent link: https://www.econbiz.de/10011258728
Once upon a time there was a classical financial world in which all the Libors were equal. Standard textbooks taught that simple relations held, such that, for example, a 6 months Libor Deposit was replicable with a 3 months Libor Deposits plus a 3x6 months Forward Rate Agreement (FRA), and that...
Persistent link: https://www.econbiz.de/10011259157
Whilst some valid and justified arguments have been put forward in favour of ring fencing, that is, constructing a fire-wall between consumer and investment banks, and that such activities can be achieved without re structuring banks into separate legal entities, the Liikanen Report highlights...
Persistent link: https://www.econbiz.de/10011259246
Repo is used in India as an instrument for monetary policy by institutionalizing daily Liquidity Adjustment Facility … (LAF) which allows banks and Primary Dealers to manage their liquidity needs. Liquidity stress in the market has an impact …-bank uncollateralized call market and the call rates are prone to liquidity shocks in the system. The spread between Call and Repo rates is …
Persistent link: https://www.econbiz.de/10011260388