The presence of a lower bound of zero on nominal interest rates has important implications for the conduct of optimal monetary policy. Standard rational expectations models can have alternative steady states as well as non-unique laws of motion, i.e. there can be possible sunspot equilibria....

This paper employs stochastic simulations of a small structural rational expectations model to investigate the consequences of the zero bound on nominal interest rates. We find that if the economy is subject to stochastic shocks similar in magnitude to those experienced in the U.S. over the...

A two-country sticky-price model is used to analyse the interactions between fiscal and monetary policy. The role of an u0091activistu0092 fiscal policy as a stabilisation tool is considered and a measure of the welfare gains from international fiscal policy cooperation is derived. It is found...

These Guidelines recognise that the risks faced by each institution vary significantly depending on its business and funding model, its activities and structure, its size or its interconnectedness to other institutions or to the financial system in general. The Guidelines also recognise that...

The Capital Requirements Regulation (CRR) and the Capital Requirements Directive (CRD) set out prudential requirements for banks and other financial institutions which have been applied from 1 January 2014. Among others, the CRR contains specific mandates for the EB A to develop draft Regulatory...