via variable rate tenders. The relation between market rate of interest and liquidity is derived from a single bank … supply and target liquidity. We model equilibrium bid behaviour in the tenders and explain the underbidding phenomenon … reserve maintenance period. Finally, we review the data from the ECB variable rate tenders and find that the ECB has been …

in the context of fixed rate liquidity tenders.It is shown that banks' bidding crucially depends on the central bank … models the money market equilibrium and analyses Banks' bidding when the central bank uses variable rate tenders … determination under alternative liquidity policy rules that a central bank might apply in fixed rate tenders.It is shown that there …

tenders. Banks’ bidding is shown to depend crucially on the central bank’s liquidity policy as regards tender allotments. The …This paper presents a model of the optimal bidding behaviour of a single bank in the context of fixed rate liquidity … paper also analyses ECB liquidity policy in terms of the model. The ECB, while applying fixed rate tenders, appears to have …