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Open market operations play a key role in allocating central bank funds to the banking system and thereby to steer short-term interest rates in line with the stance of monetary policy. Many central banks apply so-called “fixed rate tender” auctions in their open market operations. This note...
Persistent link: https://www.econbiz.de/10010301307
short-term interest rates in line with the stance of monetary policy. This note presents some elements of a theory of …
Persistent link: https://www.econbiz.de/10011604183
The European Central Bank (ECB) carried out a study of the social and private costs of different payment instruments with the participation of 13 national central banks in the European System of Central Banks (ESCB). It shows that the costs to society of providing retail payment services are...
Persistent link: https://www.econbiz.de/10011606289
A major lesson of the recent financial crisis is that the interbank lending market is crucial for banks that face uncertainty regarding their liquidity needs. This paper examines the efficiency of the interbank lending market in allocating funds and the optimal policy of a central bank in...
Persistent link: https://www.econbiz.de/10010287158
It is argued that bidders in liquidity-providing central bank operations should typically possess declining marginal valuations. Based on this hypothesis, we construct an equilibrium in central bank refinancing operations organised as variable rate tenders. In the case of the discriminatory...
Persistent link: https://www.econbiz.de/10011604714
financial crisis. Since the start of the financial crisis, however, we find that MRO auction outcomes even exacerbated the …
Persistent link: https://www.econbiz.de/10010270729
financial crisis. Since the start of the financial crisis, however, we find that MRO auction outcomes even exacerbated the …
Persistent link: https://www.econbiz.de/10010300713
In this paper we employ a time series econometric framework to explore the structural determinants of the spread between the euro overnight rate and the ECB?s policy rate (EONIA spread) aiming to explain the widening of the EONIA spread in the period from mid-2004 to mid-2006. We mainly estimate...
Persistent link: https://www.econbiz.de/10010297976
We employ a time series econometric framework to explore the structural determinants of the spread between the European Overnight Rate and the ECB’s Policy Rate (EONIA spread) aiming to explain the widening of the EONIA spread from mid-2004 to mid-2006. In particular, we estimate a model on...
Persistent link: https://www.econbiz.de/10011605029
We analyze the impact of the recent financial market crisis on the Euro Overnight Index Average (EONIA) and interbank market trading and assess the effectiveness of the ECB liquidity policy between 07/2007 - 08/2008. We extend the model of [QM06] by (i) incorporating the microstructure of the...
Persistent link: https://www.econbiz.de/10011605293