scholarly journals The ECB, Between Conservatism and Pragmatism

2016 ◽  
Vol 5 (1) ◽  
pp. 25-52 ◽  
Author(s):  
Cécile Bastidon ◽  
Philippe Gilles ◽  
Nicolas Huchet
Keyword(s):  
Monetary Policy ◽  
Economic Activity ◽  
Financial Crises ◽  
Financial Stability ◽  
Banking Sector ◽  
Private Funding ◽  
European Central ◽  
Forward Guidance ◽  
Policy Transmission ◽  
Theoretical Construction

Abstract The 2008 and 2011 crises have durably affected the conditions of monetary policy transmission, particularly in the euro area. However, it is generally considered that the European Central Bank’s (ECB) monetary policy truly became unconventional only at a late stage. Our contribution is threefold. We first show that the notion of “conventional” monetary policy, which is the reference of this assessment, is a recent theoretical construction. Secondly, the mandate of the ECB, which is its institutional expression, may raise specific difficulties in managing major financial crises, particularly with regards to the forward guidance of expectations and the commitment to an accommodative policy. Finally, the resulting policies have, at this stage, paradoxically achieved acceptable levels of macroeconomic and overall financial stability, but failed to restore a private funding supply to the banking sector enabling it to play its normal role in financing economic activity.

An Historical Perspective on the Quest for Financial Stability and the Monetary Policy Regime

2018 ◽  
Vol 78 (2) ◽  
pp. 319-357 ◽  
Author(s):  
Michael D. Bordo
Keyword(s):  
Monetary Policy ◽  
Financial Crises ◽  
Financial Stability ◽  
Historical Perspective ◽  
Asset Price ◽  
Financial Instability ◽  
Historical Evidence ◽  
Policy Regime ◽  
Extreme Form ◽  
Credit Booms

This article surveys the co-evolution of monetary policy and financial stability for a number of countries from 1880 to the present. Historical evidence on the incidence, costs, and determinants of financial crises (the most extreme form of financial instability), combined with narratives on some famous financial crises, suggests that financial crises have many causes, including credit-driven asset price booms, which have become more prevalent in recent decades, but in general financial crises are very heterogeneous and hard to categorize. Moreover, evidence shows that the association across the country sample between credit booms, asset price booms, and serious financial crises is quite weak.

scholarly journals Economic Insecurity as Systemic Risk

2015 ◽  
Vol 62 (s1) ◽  
pp. 29-36
Author(s):  
Ion Pârţachi ◽  
Eugeniu Gârlă
Keyword(s):  
Systemic Risk ◽  
Economic Activity ◽  
Financial Stability ◽  
Banking Sector ◽  
Activity Index ◽  
Analytical Description ◽  
Economic Security ◽  
Economic Insecurity ◽  
Corporate Sector ◽  
New Approach

Abstract Difficulties related to the problem of evaluating the economic security / insecurity, including the threshold of economic security / insecurity, namely the impossibility of giving an analytical description of a criterion entirely made up of a set of indicators describing the degree of economic security / insecurity, makes more and more researchers, including the authors, to seek indirect ways of finding solutions, for example considering systemic risk., as a measure of evaluation. Thus, starting from a new approach, and given the specific components of systemic risk to financial stability: the banking sector, corporate sector, public sector, volume of credits, economic activity index the threshold vector of economic security / insecurity can be developed. The study shows that systemic risk can be used to measure the threshold of economic security /insecurity.

scholarly journals Monetary Policy Surprises, Credit Costs, and Economic Activity

2015 ◽  
Vol 7 (1) ◽  
pp. 44-76 ◽  
Author(s):  
Mark Gertler ◽  
Peter Karadi
Keyword(s):  
Monetary Policy ◽  
High Frequency ◽  
Monetary Policy Shocks ◽  
Var Analysis ◽  
Financial Variables ◽  
Forward Guidance ◽  
Policy Transmission ◽  
Policy Shocks ◽  
Term Premia ◽  
Transmission Of Monetary Policy

We provide evidence on the transmission of monetary policy shocks in a setting with both economic and financial variables. We first show that shocks identified using high frequency surprises around policy announcements as external instruments produce responses in output and inflation that are typical in monetary VAR analysis. We also find, however, that the resulting “modest” movements in short rates lead to “large” movements in credit costs, which are due mainly to the reaction of both term premia and credit spreads. Finally, we show that forward guidance is important to the overall strength of policy transmission. (JEL E31, E32, E43, E44, E52, G01)

The Over-Burdened Central Bank and the Shift Away from Autonomy

2017 ◽  
Author(s):  
Pierre L. Siklos
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Financial Stability ◽  
Central Banks ◽  
Central Banking ◽  
Forward Guidance ◽  
Self Assessments ◽  
Crisis Conditions ◽  
Central Bankers ◽  
Influence Behavior

Many central banks took on additional responsibilities. Inadequate self-assessments remain unfinished almost a decade after the crisis erupted. Government-central bank relationships need to be conditioned on whether times are normal versus crisis conditions. Transparency confronts ambiguity when central banks must communicate the outlook and the conditionality of their decisions. Forward guidance was taken too far and ended up being futile. Central bankers simply exhausted their ability to influence behavior through mere words or ambiguous statements. This is a self-inflicted wound for institutions that are seen as overburdened. These forces leave central banking more vulnerable than is commonly acknowledged. Squaring the conventional objectives of monetary policy with the unclear aims of financial stability is difficult. Adequate limitations on the authority of central banks have yet to be thoroughly debated. We are nowhere near resolving the inherent tensions between old and new sets of central bank objectives.

scholarly journals United in Diversity? The Relationship between Monetary Policy and Prudential Supervision in the Banking Union

2018 ◽  
Vol 14 (2) ◽  
pp. 283-310
Author(s):  
Matthias Goldmann
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Financial Stability ◽  
European Central Bank ◽  
Holistic Approach ◽  
Legal Framework ◽  
Banking Union ◽  
Prudential Supervision ◽  
Single Supervisory Mechanism ◽  
European Central

Banking Union – Single Supervisory Mechanism – Economic interplay between monetary policy and prudential supervision – Strict separation envisaged by the Single Supervisory Mechanism legal framework – Legal framework does not prevent a more holistic approach – Financial stability is a legitimate consideration for monetary policy-making – Price stability is a legitimate concern for prudential supervision – Challenge to European Central Bank legitimacy and independence – Democratising the European Central Bank

scholarly journals Money and inflation in Switzerland

2022 ◽  
Vol 158 (1) ◽  
Author(s):  
Peter Kugler ◽  
Samuel Reynard
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Money Demand ◽  
Economic Activity ◽  
Monetary Aggregates ◽  
The Past ◽  
Exchange Rate Fluctuations ◽  
Policy Transmission ◽  
Secular Decline ◽  
The Relationship

AbstractThis paper characterizes the relationship between monetary aggregates, inflation and economic activity in Switzerland since the mid-1970s. Traditional forms of money demand and quantity theory relationships have remained stable over the whole period. Broad money excesses over trend values, accounting for a secular decline in interest rates and thus in trend velocity, have been followed by persistently higher inflation and output with the usual monetary policy transmission lags. Money and exchange rate fluctuations can explain the major inflation developments in Switzerland over the past four decades.

scholarly journals GLOBALISASI PERBANKAN DAN EFEKTIVITAS KEBIJAKAN MONETER DALAM PERSPEKTIF CREDIT CHANNEL

2020 ◽  
Vol 17 (1) ◽  
pp. 37-47
Author(s):  
Radius Radius
Keyword(s):  
Monetary Policy ◽  
Panel Data ◽  
Regression Model ◽  
Banking Sector ◽  
Foreign Bank ◽  
Credit Channel ◽  
Credit Growth ◽  
Policy Transmission ◽  
Outstanding Result ◽  
Transmission Of Monetary Policy

Abstrak: Penelitian berfokus pada analisis dampak kepemilikan modal asing pada pertumbuhan kredit bank serta kaitannya dengan efektivitas transmisi kebijakan moneter credit channel. Menggunakan data panel individu bank BUKU 3 dan BUKU 4 di Indonesia, analisis dilakukan terhadap tiga kelompok bank berdasarkan jenis kepemilikannya yaitu Bank Pemerintah, Bank Domestik dan Bank Asing. Hasil estimasi pada model regresi menunjukkan secara empiris bahwa globalisasi berdampak terhadap pertumbuhan kredit bank secara spesifik pada bank dengan modal asing sebagai saham pengendali utama. Temuan yang menarik adalah transmisi kebijakan moneter pada sektor perbankan di Indonesia menunjukkan hasil yang tidak efektif jika dilihat dari perspektif credit channel.Abstract: This paper focuses on the effect of foreign equity in the Indonesian banking sector towards credit growth while linked to credit channel monetary policy transmission. It was using panel data from individual banks categorized as BUKU 3 and BUKU 4 in Indonesia, the analysis performed towards three categories of a bank by its ownership, which are Government Bank, Domestic Bank, and Foreign Bank. Estimation of the regression model shows that globalization empirically affects credit growth specific on foreign-controlled banks with majority foreign equity. The outstanding result in this paper is that the transmission of monetary policy in the Indonesian banking sector turns out to be ineffective as viewed from a credit channel perspective.

Sign in / Sign up

Export Citation Format

Share Document