scholarly journals Monetary Policy and Cross-Border Interbank Market Fragmentation: Lessons from the Crisis

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Tobias S. Blattner ◽  
Jonathan M. Swarbrick
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Financial Structure ◽  
Real Economy ◽  
Interbank Market ◽  
Cross Border ◽  
Market Fragmentation ◽  
Initial Shock ◽  
Asset Purchases

AbstractWe present a two-country model featuring risky lending and cross-border interbank market frictions. We find that (i) the strength of the financial accelerator, when applied to banks operating under uncertainty in an interbank market, will critically depend on the economic and financial structure of the economy; (ii) adverse shocks to the real economy can be the source of banking crisis, causing an increase in interbank funding costs, aggravating the initial shock; and (iii) asset purchases and central bank long-term refinancing operations can be effective substitutes for, or supplements to, conventional monetary policy.

Hauptrefinanzierungszins, Interbankenmarkt und Geldangebot im Euroraum

2011 ◽  
Vol 62 (2) ◽  
Author(s):  
Achim Hauck ◽  
Ulrike Neyer ◽  
Thomas Vieten
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Central Bank ◽  
Money Supply ◽  
Interbank Market ◽  
Policy Variable ◽  
Operating Target ◽  
The Interest Rate ◽  
Transmission Of Monetary Policy

SummaryIn macroeconomic models, the nominal money supply, the long-term nominal interest rate, or even the inflation rate usually serves as the monetary policy variable. In practice, however, none of these variables is directly controlled by the central bank. Consequently, these models do not accurately reflect the implementation of monetary policy. Based on a theoretical model which incorporates the main institutional features of the euro area, this paper analyzes the transmission of monetary policy impulses from their implementation (setting the interest rate at which banks can obtain liquidity from the central bank) via the interbank market to the aggregate money and credit supply in an economy. Building on this analysis, we discuss the ability of the central bank to steer its operating target, the interbank market interest rate, and the money supply.

Global Financial Crisis and Its Impact on Russia

2009 ◽  
pp. 9-27 ◽  
Author(s):  
A. Kudrin
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Financial Crisis ◽  
Central Bank ◽  
Global Financial Crisis ◽  
Developed Countries ◽  
Real Economy ◽  
Energy Prices ◽  
Russian Government ◽  
The Real

The article examines the causes of origin and manifestation of the current global financial crisis and the policies adopted in developed countries in 2007—2008 to deal with it. It considers the effects of the financial crisis on Russia’s economy and monetary policy of the Central Bank in the current conditions as well as the main guidelines for the fiscal policy under different energy prices. The measures for fighting the crisis that the Russian government and the Central Bank use to support the real economy are described.

The Link between German Short- and Long-Term Interest Rates. Some Evidence against a Term Structure Oriented Monetary Policy / Der Zusammenhang zwischen kurz- und langfristigen Zinssätzen in Deutschland. Empirische Evidenz gegen eine zinsstrukturorientierte Geldpolitik

1998 ◽  
Vol 217 (2) ◽  
Author(s):  
Uwe Hassler ◽  
Dieter Nautz
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Interest Rates ◽  
Term Structure ◽  
Monetary Union ◽  
Stable Relationship ◽  
Monetary Targeting ◽  
Main Indicator ◽  
Short And Long Term

SummaryCritics of the Bundesbank's monetary policy recently suggested the abandonment of monetary targeting in favour of the term structure of interest rates as the main indicator of central bank policy. However, a term structure oriented policy requires a reliable link between short- and long-term interest rates. Our analysis clearly suggests that there is no stable relationship between German short- and long-term interest rates, in particular not after the German monetary union. Consequently, the empirical results of this paper indicate that this policy has not much chance of success.

Why Chinese central bank should focus on headline inflation

2014 ◽  
Vol 64 (Supplement-2) ◽  
pp. 39-51
Author(s):  
Zhifang Su
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Food Price ◽  
Inflation Expectations ◽  
Core Inflation ◽  
Term Trend ◽  
Dynamic Relationship ◽  
High Inflation ◽  
Long Term Trend

In this paper, we explore the change in short-term headline-core inflation dynamic relationship using threshold error correction model, and explain why the Chinese central bank should focus on headline inflation when conducting monetary policy. The results find that: (1) the deviation between core and headline inflation is eliminated mainly through reverting core inflation to headline inflation in high inflation period, indicating that headline inflation catches the long-term trend of inflation much better than core inflation does; (2) movements in food price have become a significant source of public’s inflation expectations and food inflation persistence is increasing, reflecting that the rising food price may not have been a transient phenomenon but has become a part of the long-term trend of inflation. The above conclusions imply Chinese central bank should not implement the monetary policy based on core inflation excluding food price but should make a certain response to the surging food price.

scholarly journals Review of the Bank of Russia – NES Workshop ‘Main Challenges in Banking: Risks, Liquidity, Pricing, and Digital Currencies’

2021 ◽  
Vol 80 (4) ◽  
pp. 124-136
Author(s):  
Ivan Khotulev ◽  
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Systemic Risk ◽  
Credit Spreads ◽  
Information Flows ◽  
Real Economy ◽  
The Real ◽  
Market Participants ◽  
Central Bankers ◽  
Liquidity Pricing

In October 2021, the Bank of Russia and the New Economic School (NES) hosted a joint international online workshop titled ‘Main Challenges in Banking: Risks, Liquidity, Pricing, and Digital Currencies’. Five papers were presented. They addressed various issues in banking which are currently of paramount importance to central bankers, market participants, and academics: the connections between systemic risk and the real economy, the digitalisation of finance and information asymmetries, credit spreads and monetary policy, the improvement of information flows and outcomes in credit markets, the introduction of central bank digital currencies, and bank intermediation.

Central Bank Planning

2018 ◽  
Author(s):  
Benjamin Braun
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Interest Rates ◽  
Practical Reasoning ◽  
Structural Break ◽  
Central Banks ◽  
State Agency ◽  
Policy Interventions ◽  
Forward Guidance

Central banks have increasingly used communication to guide market actors’ expectations of future rates of interest, inflation, and growth. However, aware of the pitfalls of (financial) central planning, central bankers until recently drew a line by restricting their monetary policy interventions to short-term interest rates. Longer-term rates, they argued, reflected decentralized knowledge and should be determined by market forces. By embracing forward guidance and quantitative easing (QE) to target long-term rates, central banks have crossed that line. While consistent with the post-1980s expansion of the temporal reach of monetary policy further into the future, these unconventional policies nevertheless mark a structural break—the return of hydraulic macroeconomic state agency, refashioned for a financialized economy. This chapter analyses the theoretical and practical reasoning behind this shift in the governability paradigm and examines the epistemic and reputational costs of modern central bank planning and the non-market setting of long-term bond prices.

scholarly journals Urgensi Berdirinya Bank Sentral Syariah Di Indonesia

2020 ◽  
Vol 9 (2) ◽  
pp. 153-170
Author(s):  
Agus Pandoman
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Gold Standard ◽  
Islamic Finance ◽  
Financial Policy ◽  
Real Economy ◽  
Monetary Policies ◽  
Historical Approach ◽  
The Real ◽  
Basic Philosophy

Bank Indonesia has been established as a central bank that develops dual monetary policy. This paper identifies the challenges faced in Islamic financial policy that are different from other monetary policies. With a historical approach to law it can be concluded that there is still an opportunity for BI to develop Islamic finance in Indonesia by reinforcing its basic philosophy of returning to the real economy in the gold standard. Some suggestions for the implementation of the technical treatment of finance have been raised, but there is a need to accompany the implementation by stabilizing all Islamic-oriented central bank laws.

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