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Macroprudential policy and the revolving door of risk : lessons from leveraged lending guidance

Kim, Sooji; Plosser, Matthew C.; Santos, João A. C. - 2017

We investigate the U.S. experience with macroprudential policies by studying the interagency guidance on leveraged lending. We find that the guidance primarily impacted large, closely supervised banks, but only after supervisors issued important clarifications. It also triggered a migration of...

Persistent link: https://www.econbiz.de/10011657569

Banking supervision: the perspective from economics

Hirtle, Beverly J. - 2020

less attention to bank supervision as a distinct activity. Indeed, much of the banking literature has used the terms … "supervision" and "regulation" interchangeably. This paper provides a heuristic review of the economics literature on … microprudential bank supervision, highlighting broad findings and existing gaps, especially those related to work on supervision …

Persistent link: https://www.econbiz.de/10012391496

An investigation of the gains from commitment in monetary policy

Schaumburg, Ernst (contributor); … - 2003 - [Elektronische Ressource]

This paper proposes a simple framework for analyzing a continuum of monetary policy rules characterized by differing degrees of credibility, in which commitment and discretion become special cases of what we call quasi commitment. The monetary policy authority is assumed to formulate optimal...

Persistent link: https://www.econbiz.de/10001783067

The overnight interbank market : evidence from the G-7 and the euro zone

Prati, Alessandro (contributor); … - 2001 - [Elektronische Ressource]

This study of the major industrial countries' interbank markets for overnight loans links the behavior of very short-term interest rates to the operating procedures of the countries' central banks. Previous studies have focused on key features of the U.S. federal funds rate's behavior. We find...

Persistent link: https://www.econbiz.de/10001630855

The execution of monetary policy : a tale of two central banks

Bartolini, Leonardo (contributor); … - 2003 - [Elektronische Ressource]

The Eurosystem and the U.S. Federal Reserve System follow quite different approaches to the execution of monetary policy. The former institution adopts a "hands-off" approach that largely delegates to depository institutions the task of stabilizing their own liquidity at high frequency. The...

Persistent link: https://www.econbiz.de/10001752004

How abundant are reserves? : evidence from the wholesale payment system

Afonso, Gara; Duffie, Darrell; Rigon, Lorenzo; Shin, … - 2022

Before the era of large central bank balance sheets, banks relied on incoming payments to fund outgoing payments in order to conserve scarce liquidity. Even in the era of large central bank balance sheets, rather than funding payments with abundant reserve balances, we show that outgoing...

Persistent link: https://www.econbiz.de/10013465317

Banks' balance-sheet costs, monetary policy, and the ON RRP

Afonso, Gara; Cipriani, Marco; La Spada, Gabriele - 2022

In June 2022, the Federal Reserve started reducing the size of its balance sheet, which had expanded to just under $9 trillion in response to the COVID-19 pandemic. However, whereas banks' reserves at the Federal Reserve have decreased, the investment of money market funds (MMFs) at the Federal...

Persistent link: https://www.econbiz.de/10013465412

Market-function asset purchases

Duffie, Darrell; Keane, Frank - 2023

This paper investigates the goals, costs, and benefits of official-sector purchases of government securities for the purpose of restoring market functionality. We explore the design of market-function purchase programs, including their communication, triggers, operational protocols, exit, and...

Persistent link: https://www.econbiz.de/10014232988

Dealer capacity and U.S. treasury market functionality

Duffie, Darrell; Fleming, Michael J.; Keane, Frank; … - 2023 - Revised October 2023

We show a significant loss in U.S. Treasury market functionality when intensive use of dealer balance sheets is needed to intermediate bond markets, as in March 2020. Although yield volatility explains most of the variation in Treasury market liquidity over time, when dealer balance sheet...

Persistent link: https://www.econbiz.de/10014393396

The optimal supply of central bank reserves under uncertainty

Afonso, Gara; La Spada, Gabriele; Mertens, Thomas; … - 2023 - Revised December 2023

This paper provides an analytically tractable theoretical framework to study the optimal supply of central bank reserves when the demand for reserves is uncertain and nonlinear. We fully characterize the optimal supply of central bank reserves and associated market equilibrium. We find that the...

Persistent link: https://www.econbiz.de/10014426250

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