Financial innovations have reduced banks' reserve holdings. Some argue the Fed's ability to set interest rates might be compromised. This concerns arises from a misunderstanding of Fed operations. Regardless of the quantity of reserve balances, the Fed can always set its federal funds rate...

The US Federal Reserve and the European Central Bank have adopted a number of measures, including aggressive policy rate cuts, to ease the liquidity crunch in the financial markets following the collapse of Lehman Brothers. Using high frequency spot and forward foreign exchange and interest rate...

In this paper it will be shown that large banks have a lower deposit rate, offer more competitive prices and finally realize higher profitability than the small ones. Data cover Western European Banks as well as the United States during the period 1997-2008. Data source is O.E.C.D. Panel data...

Using a unique dataset of the Euro area and the U.S. bank lending standards, we find that low (monetary policy) short-term interest rates soften standards, for household and corporate loans. This softening – especially for mortgages – is amplified by securitization activity, weak supervision...

In this paper it will be shown that large banks have a lower deposit rate, offer more competitive prices and finally realize higher profitability than the small ones. Data cover Western European Banks as well as the United States during the period 1997-2008. Data source is O.E.C.D. Panel data...

We analyze the impact that reserve levels accumulated through the preceding day in a reserve maintenance period have on the level of the federal funds rate each morning prior to when open market operations are arranged. Our empirical results and other evidence provided about intraday patterns of...

This paper seeks to explore how the relationships among interest rates, user cost of capital and housing price dynamics vary across countries with different mortgage financing arrangements and housing supply systems. The paper starts with a survey of the theoretical and empirical literature on...

Fluctuations in housing prices are relevant to wealth accumulation, labor mobility, consumption, macroeconomic volatility, and financial market stability. However, it is ex ante difficult to know when housing price movements are due to fundamentals, such as changes in the user cost of capital,...

The monetary conditions index is a composite index of interest and exchange rates frequently used by central banks, the International Monetary Fund, and the Organisation for Economic Cooperation and Development. This paper considers the benefits and weaknesses of the monetary conditions index in...

This paper investigates determinants of financial saving in Tanzania during the period 1967-2010. Both OLS method and dynamic error correction (coitegration) model (ECM) approaches were employed to test the hypothesis that the interest rate elasticity of financial savings was positive during the...