scholarly journals ECB policy responses between 2007 and 2014: A chronological analysis and an assessment of their effects

2016 ◽  
Vol 63 (4) ◽  
pp. 455-473 ◽  
Author(s):  
Carlos Rodríguez ◽  
Carlos Carrasco
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Interest Rates ◽  
Sovereign Debt ◽  
Global Financial Crisis ◽  
Debt Crisis ◽  
Lender Of Last Resort ◽  
Policy Responses ◽  
The One ◽  
The Global Financial Crisis

The paper analyses the monetary policy responses of the European Central Bank (ECB) to the global financial crisis and the European sovereign debt crisis. Our goals are on the one hand to explain chronologically the main measures in conventional and unconventional policies adopted by the ECB and on the other hand to analyse their effects on key interest rates, monetary aggregates and the money multiplier. The assessment is that the ECB?s monetary policy responses to the crisis have been ?too little, too late?, constrained by the institutional framework, which prevents the ECB from acting as a true central bank with the role of lender of last resort.

HOW CBN CONFRONTED THE MELTDOWN: THE GLOBAL FINANCIAL CRISIS AND THE CENTRAL BANK OF NIGERIA’S RESPONSE

2017 ◽  
Vol 62 (01) ◽  
pp. 147-161
Author(s):  
EMRE OZSOZ ◽  
MUSTAPHA AKINKUNMI ◽  
ISMAIL CAGRI AY ◽  
ADEMOLA BAMIDELE
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Central Bank ◽  
Global Financial Crisis ◽  
Large Population ◽  
Reserve Requirement ◽  
Policy Responses ◽  
Positive Growth ◽  
Discount Window ◽  
The Global Financial Crisis

This paper provides an analysis of policy responses to the Global Financial Crisis by the Central Bank of Nigeria (CBN). Given its unique position as a major commodity exporter with a large population, Nigerian authorities utilized a mixture of policies including reductions in the monetary policy rate and capital reserve requirement, lending through the expanded discount window, money market interbank transactions guaranty and limitations on deposit money banks’ (DMBs) foreign exchange net open positions. CBN also rolled over margin loans that were extended to equity investors. As a result the country weathered the financial crisis with limited damage and recorded positive growth rates between 2008 and 2010.

scholarly journals Framework for Preserving Financial Stability in Montenegro

2014 ◽  
Vol 3 (1) ◽  
pp. 27-41 ◽  
Author(s):  
Radoje Žugić ◽  
Nikola Fabris
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Interest Rates ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Central Banks ◽  
Primary Objective ◽  
Policy Framework ◽  
Policy Objective ◽  
The Global Financial Crisis

Abstract The global financial crisis has challenged the traditional monetary policy framework of one instrument (short-term interest rates) - one objective (price stability). More and more central banks nowadays consider financial stability as a monetary policy objective, whereas the Central Bank of Montenegro is the only one that has identified financial stability as its primary objective. As this is a relatively new objective, all central banks endeavouring to attain this objective have been facing numerous difficulties. Therefore, the article analyzes some of these difficulties such as defining financial (in)stability, the selection of indicators, macroeconomic environment for preserving financial stability, and the like. The main objective of the paper is to analyse the framework for preserving financial stability in Montenegro and the challenges that the Central Bank of Montenegro has been facing in accomplishing this objective

A NEW ERA FOR MONETARY POLICY: CHALLENGES FOR THE EUROPEAN CENTRAL BANK

2017 ◽  
Vol 62 (01) ◽  
pp. 57-86 ◽  
Author(s):  
AD VAN RIET
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Interest Rates ◽  
European Central Bank ◽  
Global Financial Crisis ◽  
Balance Sheet ◽  
Price Stability ◽  
Lender Of Last Resort ◽  
New Era ◽  
European Central

Since the start of the global financial crisis, the European Central Bank (ECB) has faced exceptional challenges in fulfilling its price stability mandate, marking the start of a new era of monetary policy-making for the eurozone. This paper reviews the ECB’s evolving response from mid-2007 to early-2015, showing how it combined the standard tool of adjusting its policy interest rates with non-standard passive and active balance-sheet measures, accompanied by a forward guidance of its intended monetary stance. Altogether, the ECB stayed focused on price stability while fulfilling the two classical roles of lender of last resort to resolve money market tensions and market maker of last resort to repair monetary transmission. Addressing the many challenges was complicated by the nexus between fragile banks and vulnerable governments, the ensuing financial fragmentation and the complex institutional and political structure of the eurozone. Looking ahead, the new reinforced European financial architecture could make the ECB’s monetary policy task of maintaining price stability for the eurozone easier to accomplish.

scholarly journals The Federal Reserve’s Dollar Swap Lines and the European Central Bank during the global financial crisis of 2007–09

2020 ◽  
Vol 44 (4) ◽  
pp. 723-747 ◽  
Author(s):  
Emmanuel Carré ◽  
Laurent Le Maux
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Federal Reserve ◽  
European Central Bank ◽  
Global Financial Crisis ◽  
Lender Of Last Resort ◽  
European Central ◽  
The Interest Rate ◽  
The Global Financial Crisis

Abstract Although the literature has studied the role of the Federal Reserve as the global lender of last resort in 2007–09, many aspects of the Dollar Swap Lines to the European Central Bank need further exploration. Accordingly, we provide original evidence about the auction operations, allotted amounts and interest rates with regard to the Federal Reserve’s dollar swaps and the European Central Bank’s dollar provision. More specifically, we examine the demand side of the Dollar Swap Lines (whereas the existing literature mentions the supply side only) and we scrutinise the interest rate (whereas the literature concentrates on volumes) set by the Federal Reserve, and also the rate set by the European Central Bank. Our findings cast light on the nature of the relationship between the Federal Reserve and the European Central Bank. Finally, we contribute to the literature on the global lender of last resort by coining the notion of the financial dilemma, under the dollar system within a framework of globalised financial markets.

scholarly journals The Effect of Central Bank Communication on the Capital Buffer of Banks: Evidence from an Emerging Economy

2018 ◽  
Vol 3 (1) ◽  
pp. 1-26
Author(s):  
Rodolfo Tomás da Fonseca Nicolay ◽  
Claudio Oliveira de Moraes ◽  
Bruno Pires Tiberto
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Interest Rates ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Regulatory Capital ◽  
Communication Signals ◽  
Central Bank Communication ◽  
The Interest Rate ◽  
The Global Financial Crisis

The global financial crisis has revealed that the coordination between monetary policy and financial stability should be part of economic policy. This study examines the effects of monetary policy on the capital buffer (financial stability proxy) in the Brazilian economy and, in particular, how communication about both monetary policy and normative macroprudential policy affect the capital buffer maintained by banks. The study presents three main results: i) banks react strongly to monetary policy changes by increasing (reducing) the capital buffer in response to an increase (decrease) in the interest rate; ii) banks increase (decrease) the capital buffer when the central bank monetary policy communication signals an increase (decrease) in interest rates; and iii) banks use the capital buffer to accommodate the new measures of regulatory capital: the announcement of restrictive (liberalizing) capital measures reduces (increases) the capital buffer.

Lender of Last Resort

2019 ◽  
pp. 601-629
Author(s):  
Xavier Freixas ◽  
Bruno M. Parigi
Keyword(s):  
Sovereign Debt ◽  
Global Financial Crisis ◽  
Banking Industry ◽  
Debt Crisis ◽  
Theoretical Models ◽  
Safety Net ◽  
Interbank Market ◽  
Lender Of Last Resort ◽  
Liquidity Shocks ◽  
The Global Financial Crisis

The global financial crisis and the sovereign debt crisis in Europe have redefined the functions of the lender of last resort (LOLR). First, they have placed the LOLR at the intersection of monetary policy, fiscal policy, supervision, and regulation of the banking industry. Second, they have given regulatory authorities the additional responsibility of monitoring the interbank market. Third, they have extended the LOLR role to cover the possible bailout of non-bank institutions, including sovereign countries. This chapter explores the link between the theoretical models of the banking industry and the unprecedented policies displayed in the aftermath of the crisis. We begin by examining the justification of LOLR in a simplified framework where only liquidity shocks arise, to move to a setting where liquidity shocks cannot be disentangled from solvency ones. We then study contagion in the interbank market and systemic risk, two pathologies due to the imperfections of the financial markets, and we discuss the issues raised by the implementation of the LOLR policy within the safety net.

Welfare Reform in Greece

2017 ◽  
Author(s):  
Maria Petmesidou
Keyword(s):  
Sovereign Debt ◽  
Global Financial Crisis ◽  
Debt Crisis ◽  
Refugee Crisis ◽  
Social Investment ◽  
New Parties ◽  
Future Direction ◽  
The Global Financial Crisis ◽  
Spending Cuts ◽  
Large Sections

Greece developed a pension-heavy, clientelist, hybrid Mediterranean welfare state with many gaps in coverage. The global financial crisis of 2008 triggered a severe sovereign debt crisis, compelling the country to accept three bailout packages with stringent conditions as to spending cuts, privatization, and openness to international competition. Severe austerity has caused a protracted recession: the economy lost more than a quarter of its GDP between 2008 and 2015. The Mediterranean refugee crisis impacted severely on the country. New parties of the extreme left (SYRIZA) and extreme right (Golden Dawn) have gained support. SYRIZA was elected on an anti-austerity platform but failed to deliver and a fourth rescue package is under negotiation. The more likely future direction consists in an ever-tighter austerity programme with the immizeration of large sections of the population. A move towards neo-Keynesian intervention and social investment seems unlikely, given the level of debt and the bailout conditions.

Conclusions

2017 ◽  
Author(s):  
Yilmaz Akyüz
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Interest Rates ◽  
Global Financial Crisis ◽  
Developing Economies ◽  
Quantitative Easing ◽  
Unconventional Monetary Policy ◽  
Advanced Economies ◽  
The Global Financial Crisis ◽  
Zero Bound

The preceding chapters have examined the deepened integration of emerging and developing economies (EDEs) into the international financial system in the new millennium and their changing vulnerabilities to external financial shocks. They have discussed the role that policies in advanced economies played in this process, including those that culminated in the global financial crisis and the unconventional monetary policy of zero-bound interest rates and quantitative easing adopted in response to the crisis, as well as policies in EDEs themselves....

Conclusion

2018 ◽  
Author(s):  
Nauro F. Campos ◽  
Paul De Grauwe ◽  
Yuemei Ji
Keyword(s):  
Financial Crisis ◽  
Business Cycle ◽  
Sovereign Debt ◽  
Global Financial Crisis ◽  
Debt Crisis ◽  
Structural Reform ◽  
Structural Reforms ◽  
Sovereign Debt Crisis ◽  
The Business Cycle ◽  
The Global Financial Crisis

Structural reform policies move like the business cycle. There are moments when these are implemented with great fervour and others when they are put on the back burner or even dismantled. After the global financial crisis, and in particular the sovereign debt crisis in Europe, many countries were forced by creditor countries or were self-imposed to apply deep reforms to their product markets and especially to their labour markets. Now that Europe is recovering, the pressure to implement structural reforms has abated....

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