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This paper reviews literature on the empirical relationship between vulnerabilities in the financial system and the macroeconomy, and how monetary policy affects that connection. Financial vulnerabilities build up over time, with both risk appetite and risk taking rising during economic...
Persistent link: https://www.econbiz.de/10013161882
This paper reviews the theoretical literature at the intersection of macroeconomics and finance to draw lessons on the connection between vulnerabilities in the financial system and the macroeconomy, and on how monetary policy affects that connection. This literature finds that financial...
Persistent link: https://www.econbiz.de/10013161877
provided liquidity against a range of assets during 2008-09. Dealers with lower equity returns and greater leverage prior to … liquidity in explaining dealer behavior. The results suggest that both financial performance and balance sheet liquidity play a …
Persistent link: https://www.econbiz.de/10010404154
sensitivity of these strains to risk sentiment deterioration. Cross-border flows through banks for excess liquidity support … facilities leaves longer-term patterns of cross-border liquidity and capital flows broadly unchanged. While official sector … liquidity hoarding and “dash for cash” activity are expected to be lower with access to these facilities, initial evidence does …
Persistent link: https://www.econbiz.de/10012797880
Building on the facility design and application experience from the period of the global financial crisis, in March 2020 the Federal Reserve eased the terms on its standing swap lines in collaboration with other central banks, reactivated temporary swap agreements, and then introduced the new...
Persistent link: https://www.econbiz.de/10012625891
and liquidity has increased since the late 1990s, and to a lesser extent because economic growth has slowed. We reach this …
Persistent link: https://www.econbiz.de/10011647660
level of steadystate output, relative to the baseline. The impact of the new liquidity regulation is of a similar order of …
Persistent link: https://www.econbiz.de/10008935715
closely tied to fluctuations in the leverage of market-based financial intermediaries. Offering a window on liquidity, the …
Persistent link: https://www.econbiz.de/10003812553
We present evidence that the funding liquidity aggregates of U.S. financial intermediaries forecast exchange rate … estimate prices of risk using a cross-sectional asset pricing approach and show that U.S. dollar funding liquidity forecasts … liquidity channel in an intertemporal equilibrium pricing model where the “risk appetite” of dollar-funded intermediaries …
Persistent link: https://www.econbiz.de/10003812554
aggressive use of both traditional monetary policy instruments and innovative tools in an effort to provide liquidity. In this … to be necessary. -- Crisis response ; Federal Reserve ; counterparty credit risk ; liquidity risk ; limits to arbitrage …
Persistent link: https://www.econbiz.de/10003947548