Showing 1 - 10 of 15
The Term Securities Lending Facility (TSLF) was introduced by the Federal Reserve to promote liquidity in the financing markets for Treasury and other collateral. We evaluate one aspect of the program - the extent to which it has narrowed repo spreads between Treasury collateral and less liquid...
Persistent link: https://www.econbiz.de/10010283535
Many explanations for the decline in real interest rates over the last 30 years point to the role that population aging or rising income inequality plays in increasing the long-run aggregate demand for assets. Notwithstanding the importance of such factors, the starting point of this paper is to...
Persistent link: https://www.econbiz.de/10013482643
Recent events in financial markets have underlined the importance of analyzing the link between the financial health of banks and real economic activity. This paper contributes to this analysis by constructing a dynamic general equilibrium model in which the balance sheet of banks affects the...
Persistent link: https://www.econbiz.de/10003773059
We study a model with repeated moral hazard where financial contracts are not fully indexed to inflation because nominal prices are observed with delay as in Jovanovic & Ueda (1997). More constrained firms sign contracts that are less indexed to the nominal price and, as a result, their...
Persistent link: https://www.econbiz.de/10003852858
This paper assesses the merits of countercyclical bank balance sheet regulation for the stabilization of financial and economic cycles and examines its interaction with monetary policy. The framework used is a dynamic stochastic general equilibrium model with banks and bank capital, in which...
Persistent link: https://www.econbiz.de/10009728167
This paper develops a search-theoretic model to study the interaction between banking and monetary policy and how this interaction affects the allocation and welfare. Regarding how banking affects the welfare costs of inflation: First, we find that, with banking, inflation generates smaller...
Persistent link: https://www.econbiz.de/10003790575
We document that, across households, the money consumption ratio increases with age and decreases with consumption, and … that there has been a large increase in the money consumption ratio during the recent era of very low interest rates. We … construct an overlapping generations (OLG) model of money holdings for transaction purposes subject to age (older households use …
Persistent link: https://www.econbiz.de/10011895060
We examine the financial conditions of dealers that participated in two of the Federal Reserve's lender-of-last-resort (LOLR) facilities - the Term Securities Lending Facility (TSLF) and the Primary Dealer Credit Facility (PDCF) - that provided liquidity against a range of assets during 2008-09....
Persistent link: https://www.econbiz.de/10011340952
This paper examines the Federal Reserve's unprecedented liquidity provision during the financial crisis of 2007-2009. It first reviews how the Fed provides liquidity in normal times. It then explains how the Fed's new and expanded liquidity facilities were intended to enable the central bank to...
Persistent link: https://www.econbiz.de/10010283539
We examine the relationship between monetary policy operations and interbank borrowing and lending of funds using sovereign bonds as collateral. We first establish that, in the precrisis period, there are important but rather weak relations between these funding sources and that this...
Persistent link: https://www.econbiz.de/10010333597