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Banking and Sovereign Debt Crises in a Monetary Union Without Central Bank Intervention

Cheng, Jing; Dai, Meixing; Dufourt, Frédéric - 2014

We analyze the conditions of emergence of a twin banking and sovereign debt crisis within a monetary union in which: (i) the central bank is not allowed to provide direct financial support to stressed member states or to play the role of lender of last resort in sovereign bond markets, and (ii)...

Persistent link: https://www.econbiz.de/10010784130

Bailouts and Financial Fragility

Keister, Todd - Department of Economics, Rutgers University-New Brunswick - 2014

Should policy makers be prevented from bailing out investors in the event of a crisis? I study this question in a model of financial intermediation with limited commitment. When a crisis occurs, the policy maker will respond by using public resources to augment the private consumption of those...

Persistent link: https://www.econbiz.de/10010797426

What makes large bank failures so messy and what should be done about it?

McAndrews, James Joseph; Morgan, Donald P.; santos, joao; … - In: Economic Policy Review (2014) Dec, pp. 229-244

This study argues that the defining feature of large and complex banks that makes their failures messy is their reliance on runnable financial liabilities. These liabilities confer liquidity or money-like services that may be impaired or destroyed in bankruptcy. To make large bank failures more...

Persistent link: https://www.econbiz.de/10011119874

Overnight RRP operations as a monetary policy tool: Some design considerations

Frost, Joshua; Logan, Lorie; Martin, Antoine; McCabe, … - 2015

We review recent changes in monetary policy that have led to development and testing of an overnight reverse repurchase agreement (ON RRP) facility, an innovative tool for implementing monetary policy during the normalization process. Making ON RRPs available to a broad set of investors,...

Persistent link: https://www.econbiz.de/10011341005

Collateral scarcity and market functioning: Insights from the eurosystem securities lending facilities

Greppmair, Stefan; Jank, Stephan - 2023

, particularly for bonds with limited supply elasticity in the repo market. We find no evidence of substitution effects; instead, the … overall activity in the repo market expands through the collateral multiplier. The improved pricing conditions alleviate … collateral scarcity and enhance market quality in both the repo and cash markets. …

Persistent link: https://www.econbiz.de/10014438404

Repo funding and internal capital markets in the financial crisis

Düwel, Cornelia - 2013

This paper examines how the exposure of German parent banks to the disruptions on sale and repurchase markets (repo … analyzed with regard to their role as amplifiers of uncertainty about the value of collateral used in repo transactions and … core funding locations up to the Lehman Brothers bankruptcy. All in all, funding via repo markets is found to be one …

Persistent link: https://www.econbiz.de/10010312029

Overnight RRP operations as a monetary policy tool : some design considerations

Frost, Joshua; Logan, Lorie; Martin, Antoine; McCabe, … - 2015

Persistent link: https://www.econbiz.de/10010482941

Overnight RRP Operations as a Monetary Policy Tool: Some Design Considerations

Frost, Joshua; Logan, Lorie; Martin, Antoine; McCabe, … - Federal Reserve Board (Board of Governors of the … - 2015

Persistent link: https://www.econbiz.de/10011255343

Case studies on disruptions during the crisis

Yorulmazer, Tanju - In: Economic Policy Review (2014) Feb, pp. 17-28

The 2007-09 financial crisis saw many funding mechanisms challenged by a drastic reduction in market liquidity, a sharp increase in the cost of transactions, and, in some cases, a drying-up in financing. This article presents case studies of several key financial markets and intermediaries under...

Persistent link: https://www.econbiz.de/10010757403

Rollover Risk and Market Freezes

Acharya, Viral V; Gale, Douglas M; Yorulmazer, Tanju - C.E.P.R. Discussion Papers - 2009

sudden freezes. The model also provides an explicit formula for the haircut in secured borrowing or repo transactions. …

Persistent link: https://www.econbiz.de/10004980204