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The Eurosystem and the U.S. Federal Reserve System follow quite different approaches to the execution of monetary policy. The former institution adopts a "hands-off" approach that largely delegates to depository institutions the task of stabilizing their own liquidity at high frequency. The...
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"We propose a model of the interbank money market with an explicit role for central bank intervention and periodic … reserve requirements, and study the interaction of profit-maximizing banks with a central bank targeting interest rates at …"--Federal Reserve Bank of New York web site …
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