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We present a search-based model of the interbank money market and monetary policy implementation. Banks are subject to reserve requirements and the central bank tenders reserves. Interbank payments redistribute holdings and banks trade with each other in a decentralized (over-the-counter)...
Persistent link: https://www.econbiz.de/10013011352
Persistent link: https://www.econbiz.de/10011856198
the new Basel III regulation. In our model, banks hold tradable and nontradable assets. Nontradable assets are subject to …
Persistent link: https://www.econbiz.de/10011419845
crisis, recent advances in global liquidity regulation try to curb the excessive reliance on short-term wholesale funding … regulation may interfere with the central bank's influence on short-term money market rates. This paper tries to fill the gap in … asymmetric information. Regulation can be welfare-improving in the presence of an externality and also in case of collateral …
Persistent link: https://www.econbiz.de/10010342820
A two-sector general equilibrium banking model is constructed to study the functioning of a floor system of central bank intervention. Only retail banks can hold reserves, and these banks are also subject to a capital requirement, which creates “balance sheet costs�? of holding reserves. An...
Persistent link: https://www.econbiz.de/10012903922
Evidence suggests that the Colombian interbank funds market is an inhomogeneous and hierarchical network in which a few financial institutions fulfill the role of “super-spreaders” of central bank liquidity among market participants. Results concur with evidence from other interbank markets...
Persistent link: https://www.econbiz.de/10013056628
I build a general equilibrium model of the transmission of monetary policy on bank lending. Bank lending is done by individual banks that face random investment opportunities by creating inside money. Banks are subject to a reserve requirement and have access to the interbank money market. The...
Persistent link: https://www.econbiz.de/10012018953
The tendency for changes in the federal funds rate to be implemented gradually has been considered evidence of an interest rate smoothing objective for the Federal Reserve. This paper investigates whether gradual funds rate movements can be explained by the dynamic structure of the economy and...
Persistent link: https://www.econbiz.de/10014073667
We model the allocation of central bank liquidity among the participants of the interbank market by using network analysis' metrics. Our analytical framework considers that a super-spreader simultaneously excels at receiving (borrowing) and distributing (lending) central bank's liquidity for the...
Persistent link: https://www.econbiz.de/10013033408
It is commonplace to speak of central bank "independence" as if it were both a reality and a necessity. While the Federal Reserve is subject to the "dual mandate", it has substantial discretion in its interpretation of the vague call for high employment and low inflation. Most important, the...
Persistent link: https://www.econbiz.de/10010252188