in modern monetary and financial systems, namely central bank collateral frameworks. Their importance can be understood …, not defined in a market, but by the collateral frameworks and interest rate policies of central banks. Using the … collateral framework of the Eurosystem as a basis of illustration and case study, the paper brings to light the functioning …

This paper offers an encompassing analysis of the ECB's collateral criteria between 2001 and 2013. A comprehensive … database of changes to collateral criteria is compiled and structured by asset classes. The main findings can be summarized in … three stylized facts: (1) Since the outbreak of the financial crisis, the ECB has been six times more active in collateral …

Should central banks lend against low quality collateral? We characterize efficient central bank collateral policy in a … model where a bank borrows from the interbank market or the central bank. Collateral has favorable incentive effects but is … costly to transfer to lenders who value the collateral less because of imperfect collateral quality. We show that a fall in …

stability. We model the default of a large bank and analyse the resulting contagion effects. This is compared to a common shock …