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Channel systems : why is there a positive spread?

Berentsen, Aleksander; Marchesiani, Alessandro; Waller, … - 2010

An increasing number of central banks implement monetary policy via two standing facilities: a lending facility and a deposit facility. In this paper we show that it is socially optimal to implement a non-zero interest rate spread. We prove this result in a dynamic general equilibrium model...

Persistent link: https://www.econbiz.de/10008732253

Liquidity risk, credit risk and the overnight interest rate spread : a stochastic volatility modelling approach

Beirne, John; Caporale, Guglielmo Maria; Spagnolo, Nicola - 2010

In this paper we model the volatility of the spread between the overnight interest rate and the central bank policy rate (the policy spread) for the euro area and the UK during the two main phases of the financial crisis that began in late 2007. During the crisis, the policy spread exhibited...

Persistent link: https://www.econbiz.de/10003983199

Credit market competition and liquidity crises

Elena, Carletti; Leonello, Agnese - 2014

We develop a model where banks invest in reserves and loans, and face aggregate liquidity shocks. Banks with liquidity shortage sell loans on the interbank market. Two equilibria emerge. In the no default equilibrium, all banks hold enough reserves and remain solvent. In the mixed equilibrium,...

Persistent link: https://www.econbiz.de/10010249670

Asset allocation and monetary policy : evidence from the eurozone

Hau, Harald; Lai, Sandy - 2014

The eurozone has a single short-term nominal interest rate, but monetary policy conditions measured by real short-term interest rates varied substantially across countries in the period 2003 - 2010. We use this cross-country variation in the (local) tightness of monetary policy to examine its...

Persistent link: https://www.econbiz.de/10010413745

The price of liquidity : bank characteristics and market conditions

Fecht, Falko; Nyborg, Kjell G.; Rocholl, Jörg - 2009

We study differences in the price paid for liquidity across banks using price data at the individual bank level. Unique to this paper, we also have data on individual banks' reserve requirements and actual reserve holdings, thus allowing us to gauge the extent to which a bank is short or long...

Persistent link: https://www.econbiz.de/10003817884

The liquidity premium of digital payment vehicle

Chen, Zefeng; Jiang, Zhengyang - 2022

Do digital payment technologies generate liquidity premia like cash and Treasury? We provide an estimate in the context of the world's largest digital payment platform, Alipay. Our empirical strategy exploits the variation in the timing of the introduction of money market funds that users on...

Persistent link: https://www.econbiz.de/10013365370

CBDC and the operational framework of monetary policy

Abad, Jorge; Nuño, Galo; Thomas, Carlos - 2024

We analyze the impact of introducing a central bank-issued digital currency (CBDC) on the operational framework of monetary policy and the macroeconomy as a whole. To this end, we develop a New Keynesian model with heterogeneous banks, a frictional interbank market, a central bank with deposit...

Persistent link: https://www.econbiz.de/10014456302

Growing together : Croatia and Latvia

Thorvaldur Gylfason; Hochreiter, Eduard - 2010

We compare and contrast the economic growth performance of Croatia and Latvia since the collapse of communism in 1991 … governance, and institutional reforms have played a significant role in raising economic output and efficiency in both Croatia … and Latvia. The EU perspective made a more significant contribution to growth in Latvia than in Croatia, even if Latvia …

Persistent link: https://www.econbiz.de/10008697476

Old-age provision in transition : the case of Croatia

Werding, Martin; Primorac, Marko - 2016

The Croatian system of old-age provision comprises a traditional public pay-as-you-go scheme and a mandatory funded scheme ("second pillar") that will provide increasing amounts of supplementary pensions to those entering retirement in the future. Due to the continuing economic crisis, the...

Persistent link: https://www.econbiz.de/10011429587

Do leaders affect ethical conduct?

D'Adda, Giovanna; Darai, Donja; Weber, Roberto A. - 2014

We study whether leaders influence the unethical conduct of followers. To avoid selection issues present in natural environments, we use a laboratory experiment in which we form groups and assign leadership roles at random. We study an environment in which groups compete, with dishonest behavior...

Persistent link: https://www.econbiz.de/10010383805