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Liquidity Dependence and the Waxing and Waning of Central Bank Balance Sheets
Acharya, Viral V.; Chauhan, Rahul S.; Rajan, Raghuram Govind - National Bureau of Economic Research - 2023
in 2017, there was no commensurate shrinkage of these claims on liquidity. Consequently, the financial sector was left … more sensitive to potential liquidity shocks, with weaker-capitalized banks most exposed. This necessitated Fed liquidity … provision in September 2019 and again in March 2020. Liquidity-risk-exposed banks suffered the most drawdowns and the largest …
Persistent link: https://www.econbiz.de/10014247971
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Loose Monetary Policy and Financial Instability
Grimm, Maximilian; Jordà, Òscar; Schularick, Moritz; … - National Bureau of Economic Research - 2023
Do periods of persistently loose monetary policy increase financial fragility and the likelihood of a financial crisis? This is a central question for policymakers, yet the literature does not provide systematic empirical evidence about this link at the aggregate level. In this paper we fill...
Persistent link: https://www.econbiz.de/10014226155
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Bank Funding Risk, Reference Rates, and Credit Supply
Cooperman, Harry; Duffie, Darrell; Luck, Stephan; Wang, … - National Bureau of Economic Research - 2023
Corporate credit lines are drawn more heavily when funding markets are more stressed. This covariance elevates expected bank funding costs. We show that credit supply is dampened by the associated debt-overhang cost to bank shareholders. Until 2022, this impact was reduced by linking the...
Persistent link: https://www.econbiz.de/10014226104
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Helicopter Drops and Liquidity Traps
Amador, Manuel; Bianchi, Javier - National Bureau of Economic Research - 2023
drops can be a useful stabilization tool during a liquidity trap. With commitment, even with balance sheet constraints …
Persistent link: https://www.econbiz.de/10014247967
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Monetary Policy When the Central Bank Shapes Financial-Market Sentiment
Kashyap, Anil K.; Stein, Jeremy C. - National Bureau of Economic Research - 2022
Recent research has found that monetary policy works in part by influencing the risk premiums on both traded financial-market securities and intermediated loans. Research has also shown that when risk premiums are compressed, there is an increased likelihood of a reversal that damages the...
Persistent link: https://www.econbiz.de/10013477243
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Financial Integration and Monetary Policy Coordination
Bianchi, Javier; Coulibaly, Louphou - National Bureau of Economic Research - 2023
Financial integration generates macroeconomic spillovers that may require international monetary policy coordination. We show that individual central banks may set nominal interest rates too low or too high relative to the cooperative outcome. We identify three sufficient statistics that...
Persistent link: https://www.econbiz.de/10014447329
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Contingent Credit Under Stress
Acharya, Viral V.; Jager, Maximilian; Steffen, Sascha - National Bureau of Economic Research - 2023
' provision of liquidity insurance in the form of credit lines, their significance in managing corporate liquidity, and the …
Persistent link: https://www.econbiz.de/10014437040
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Natural and Neutral Real Interest Rates : Past and Future
Obstfeld, Maurice - National Bureau of Economic Research - 2023
This paper surveys the decline in real interest rates in advanced and emerging economies over the past several decades, linking that process to a range of global factors that have operated with different force in different periods. The paper argues that estimates of long-run equilibrium real...
Persistent link: https://www.econbiz.de/10014447270
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Connected Lending of Last Resort
Mitchener, Kris; Monnet, Eric - National Bureau of Economic Research - 2023
November 1930, the Banque de France (BdF) lent selectively rather than broadly, providing substantially more liquidity to …
Persistent link: https://www.econbiz.de/10013537763
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How Abundant Are Reserves? Evidence from the Wholesale Payment System
Afonso, Gara; Duffie, Darrell; Rigon, Lorenzo; Shin, … - National Bureau of Economic Research - 2022
order to conserve scarce liquidity. Even in the era of large central bank balance sheets, rather than funding payments with … on liquidity constraints revealed by payment behavior, our results shed light on thresholds for the adequacy of reserve …
Persistent link: https://www.econbiz.de/10013477228