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The costs of macroprudential deleveraging in a liquidity trap
Chen, Jiaqian; Finocchiaro, Daria; Lindé, Jesper; … - 2020
We examine the effects of various borrower-based macroprudential tools in a New Keynesian environment where both real and nominal interest rates are low. Our model features long-term debt, housing transaction costs and a zero-lower bound constraint on policy rates. We find that the long-term...
Persistent link: https://www.econbiz.de/10012251966
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What drives bank lending spreads and collateral requirements in the Kyrgyz Republic
Teodoru, Iulia Ruxandra - 2020
global perspective. At the same time, collateral requirements applied by banks are onerous and also constrain the quantity of … the high collateral requirements. Reforms in all these areas would support greater financial inclusion in the aftermath of …
Persistent link: https://www.econbiz.de/10012302053
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Inflation Targeting Under Asymmetric Preferences
Ruge-Murcia, Francisco Javier - 2001
This paper develops and estimates a game-theoretical model of inflation targeting where the central banker''s preferences are asymmetric around the targeted rate. Specifically, positive deviations from the target can be weighted more, or less, severely than negative ones in the central banker''s...
Persistent link: https://www.econbiz.de/10014400680
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Anticipation and Surprises in Central Bank Interest Rate Policy : The Case of the Bundesbank
International Monetary Fund - 1998
Market reaction to a change in official interest rates will depend on the extent to which the change is anticipated, and on how it is interpreted as a signal of future policy. In this paper, a technique is developed to separate the anticipated and unanticipated components of such changes and is...
Persistent link: https://www.econbiz.de/10014400820
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Pledged collateral market's role in transmission to short-term market rates
Kumar, Manmohan S.; Goel, Rohit - 2019
In global financial centers, short-term market rates are effectively determined in the pledged collateral market, where … banks and other financial institutions exchange collateral (such as bonds and equities) for money. Furthermore, the use of … long-dated securities as collateral for short tenors-or example, in securities-lending and repo markets, and prime …
Persistent link: https://www.econbiz.de/10012021913
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Central Bank Collateral Frameworks : Principles and Policies
McCaughrin, Rebecca - 2008
Central bank collateral policies came under pressure with the 2007-08 financial market crisis. This paper addresses the … rationale for and constraints in taking collateral, and recent practices in different collateral frameworks. It then considers … the risks of adverse selection. The paper concludes that (i) the collateral framework needs to include market incentives …
Persistent link: https://www.econbiz.de/10014401630
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The Chicago Plan revisited : conference paper
Benes, Jaromir; Kumhof, Michael - 2014
At the height of the Great Depression a number of leading U.S. economists advanced a proposal for monetary reform that became known as the Chicago Plan. It envisaged the separation of the monetary and credit functions of the banking system, by requiring 100% reserve backing for deposits. Irving...
Persistent link: https://www.econbiz.de/10010481421
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Counterparty Risk, Impacton Collateral Flows and Role for Central Counterparties
Aitken, James - 2009
have shifted over the past year. We estimate that the adverse impact of counterparty risk on high-grade collateral flows …
Persistent link: https://www.econbiz.de/10014403175
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Optimal macroprudential policy and asset price bubbles
Biljanovska, Nina; Górnicka, Lucyna; Vardoulakis, … - 2019
An asset bubble relaxes collateral constraints and increases borrowing by credit-constrained agents. At the same time … of a binding collateral constraint. If debt is elevated, policy should lean against the bubble more aggressively to …
Persistent link: https://www.econbiz.de/10012103635
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Credit reversals
Vázquez, Francisco - 2021
This paper studies episodes in which aggregate bank credit contracts alongside expanding economic activity-credit reversals. Using data for 179 countries during 1960-2017, the paper finds that reversals are a relatively common phenomenon--on average, they occur every five years. By comparison,...
Persistent link: https://www.econbiz.de/10012604801