scholarly journals The Role of Financial Stability Considerations in Monetary Policy and the Interaction with Macroprudential Policy in the Euro Area

2021 ◽  
Author(s):  
Ugo Albertazzi ◽  
Emmanuelle Assouan ◽  
Oreste Tristani ◽  
Gabriele Galati ◽  
Thomas Vlassopoulos ◽  
...  
Keyword(s):  
Monetary Policy ◽  
Euro Area ◽  
Financial Stability ◽  
Macroprudential Policy

scholarly journals Monetary Policy, Macroprudential Policy, and Financial Stability

2019 ◽  
Vol 11 (1) ◽  
pp. 809-832 ◽  
Author(s):  
David Martinez-Miera ◽  
Rafael Repullo
Keyword(s):  
Monetary Policy ◽  
Equilibrium Model ◽  
Financial Stability ◽  
Theoretical Perspective ◽  
Capital Requirements ◽  
Equity Capital ◽  
Open Market ◽  
Macroprudential Policy ◽  
Macroprudential Policies

This review reexamines from a theoretical perspective the role of monetary and macroprudential policies in addressing the build-up of risks in the financial system. We construct a stylized general equilibrium model in which the key friction comes from a moral hazard problem in firms’ financing that banks’ equity capital serves to ameliorate. Tight monetary policy is introduced by open market sales of government debt, and tight macroprudential policy by an increase in capital requirements. We show that both policies are useful, but macroprudential policy is more effective in fostering financial stability and leads to higher social welfare.

scholarly journals On the Limits of Macroprudential Policy

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Marcin Kolasa
Keyword(s):  
Monetary Policy ◽  
Policy Instruments ◽  
New Keynesian ◽  
Output Volatility ◽  
Macroprudential Policy ◽  
Collateral Constraints ◽  
Keynesian Model ◽  
Additional Stabilization ◽  
The Interest Rate

AbstractThis paper studies how macroprudential policy tools applied to the housing market can complement the interest rate-based monetary policy in achieving one additional stabilization objective, defined as keeping either economic activity or credit at some exogenous (and possibly time-varying) levels. We show analytically in a canonical New Keynesian model with housing and collateral constraints that using the loan-to-value (LTV) ratio, tax on credit or tax on property as additional policy instruments does not resolve the inflation-output volatility tradeoff. Perfect targeting of inflation and credit with monetary and macroprudential policy is possible only if the role of housing debt in the economy is sufficiently small. The identified limits to the considered policies are related to their predominantly intertemporal impact on decisions made by financially constrained agents, making them poor complements to monetary policy, which also operates at an intertemporal margin. These limits can be overcome if macroprudential policy is instead designed such that it sufficiently redistributes income between savers and borrowers.

scholarly journals Post-crisis business investment in the euro area and the role of monetary policy

2018 ◽  
Vol 50 (34-35) ◽  
pp. 3787-3797
Author(s):  
Martin Ademmer ◽  
Nils Jannsen
Keyword(s):  
Monetary Policy ◽  
Euro Area ◽  
Business Investment

Inflation and Financial Stability Trade‐off: Role of Monetary Policy Credibility and Fiscal Cyclicality

2020 ◽  
Author(s):  
Akhmad Syakir Kurnia ◽  
Syahid Izzulhaq ◽  
Johan Beni Maharda ◽  
Agung Kunaedi
Keyword(s):  
Monetary Policy ◽  
Financial Stability ◽  
Trade Off ◽  
Policy Credibility ◽  
Fiscal Cyclicality

scholarly journals Financial systems and the role of banks in monetary policy transmission in the euro area

2003 ◽  
pp. 235-269 ◽  
Author(s):  
M. Ehrmann ◽  
L. Gambacorta ◽  
J. Martínez-Pagés ◽  
P. Sevestre ◽  
A. Worms
Keyword(s):  
Monetary Policy ◽  
Euro Area ◽  
Monetary Policy Transmission ◽  
Financial Systems ◽  
Policy Transmission

scholarly journals The role of labor markets for euro area monetary policy

2009 ◽  
Vol 53 (8) ◽  
pp. 908-936 ◽  
Author(s):  
Kai Christoffel ◽  
Keith Kuester ◽  
Tobias Linzert
Keyword(s):  
Monetary Policy ◽  
Labor Markets ◽  
Euro Area

scholarly journals The Euro Area Sovereign Debt Crisis and the Role of ECB's Monetary Policy

2012 ◽  
Vol 3 ◽  
pp. 763-768 ◽  
Author(s):  
Angela Roman ◽  
Irina Bilan
Keyword(s):  
Monetary Policy ◽  
Euro Area ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Sovereign Debt Crisis

scholarly journals A new paradigm of modern central banking

2013 ◽  
Vol 2 (2) ◽  
pp. 75-78
Author(s):  
Aleksandra Szunke
Keyword(s):  
Monetary Policy ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Central Banks ◽  
Central Banking ◽  
First Century ◽  
Financial Instability ◽  
New Paradigm ◽  
The Global Financial Crisis

The changes in the modern monetary policy, which took place at the beginning of the twenty-first century, in response to the global financial crisis led to the transformation of the place and the role of central banks. The strategic aim of the central monetary institutions has become preventing financial instability. So far, central banks have defined financial stability as a public good, which took care independently of other monetary purposes (Pyka, 2010). Unconventional monetary policy resulted in changes the global central banking. The aim of the study is to identify a new paradigm of the role and place of the central bank in the financial system and its new responsibilities, aimed at countering financial instability.

scholarly journals MONETARY POLICY IN ADVANCED ECONOMIES DURING THE GLOBAL FINANCIAL CRISIS: LESSONS FOR LITHUANIA

Ekonomika ◽  
2014 ◽  
Vol 93 (1) ◽  
pp. 40-56
Author(s):  
Birutė Visokavičienė
Keyword(s):  
Monetary Policy ◽  
Euro Area ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Empirical Studies ◽  
Policy Instruments ◽  
Policy Tools ◽  
Currency Board ◽  
Advanced Economies ◽  
Maastricht Criteria

Abstract. The main goal of the research is to develop monetary policy tools and measures enabling to achieve macroeconomic goals of integration into the euro area in the immediate future. It is noted that until the introduction of the euro Lithuania does not have a monetary policy and applies the currency board regime pegging the litas invariably to the euro (hard peg regime). Therefore, it is not only difficult but also risky to try to achieve financial and economic stability in accordance with the relevant Maastricht criteria through fiscal policy measures alone. Monetary policy instruments are necessary to achieve price stability and the overall financial stability. Currently, Lithuania should address the problem of balancing the currency board regime and the Maastricht criteria as a macroeconomic objective through monetary policy tools and measures.The analysis of monetary policies of advanced economies and, first of all, of the euro area reveals the main features of transmission of the monetary policy to a real economy, which can contribute to the successful integration into the euro area. A systemic analysis of the monetary policy is based on monetary and economic theories, laws and patterns, scientific literature and empirical studies. The method used is the logical analysis and systemising of academic literature and modelling of the monetary policy. Such a methodological position enables the justification of the influence of the euro and monetary policy on the future development of the national economy.Key words: monetary policy, euro, exchange rate, inflation, indicators

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