rule cannot be implemented when the central bank uses standing facilities, while it can be implemented with open market …

An increasing number of central banks implement monetary policy via two standing facilities: a lending facility and a … the central bank requires government bonds as collateral. We also calibrate the model and discuss the behavior of the …

. Freeman's conclusion that the central bank should absorb losses related to default to provide risk-sharing goes against the … concern that central banks should limit their exposure to credit risk. We extend Freeman's model by introducing moral hazard …. With moral hazard, the central bank should avoid absorbing losses, contrary to Freeman's argument. However, we show that …

Foreign exchange swaps have appeared for some time in the intervention toolkit of many central banks around the world …. 332), seven of fourteen industrial-country central banks surveyed listed foreign exchange swaps against either the U …