The paper studies the central bank collateral framework and its impact on banks' liquidity under an adverse stress test … significantly after the initial shock. We find evidence of a threshold in the benefits of expanding the collateral framework and … institutions can rely on the collateral framework channel. …

The paper studies the central bank collateral framework and its impact on banks’ liquidity under an adverse stress test … significantly after the initial shock. We find evidence of a threshold in the benefits of expanding the collateral framework and … institutions can rely on the collateral framework channel …

Financial lubrication in markets is indifferent to margin posting via money or collateral; the relative price(s) of … money and collateral matter. Some central banks are now a major player in the collateral markets. Analogous to a coiled … spring, the larger the quantitative easing(QE) efforts, the longer the central banks will impact the collateral market and …