sheets (liquidity effect), banks that depend more on wholesale funding (retail effect) and low-capitalized banks (capital … levels of bank capitalization at the same time mitigate the size, retail and liquidity effects of the policies. The drag on … responded more to the credit support policies of the Eurosystem as a result of more favourable size, retail and liquidity …

thereby increase surplus liquidity. East Asian central banks with more flexible exchange rate regimes also face surplus … liquidity that mainly emanates from past accumulation of foreign reserves. We show based on an augmented Barro …-Gordon-type central bank loss function that in both cases surplus liquidity limits monetary policy autonomy. In case of fixed exchange …

to accumulate massive foreign reserves. If left unsterilized, the liquidity expansion can threaten domestic macroeconomic … stability. To contain domestic inflation these central banks absorb rather then provide liquidity in their regular monetary … surplus liquidity is less efficient, because absorbing liquidity raises the costs of monetary policy operations. By …

During the last decades a consensus has emerged that it is impossible to disentangle liquidity shocks from solvency …