scholarly journals Gravity Among Central Bank Balance Sheets: Monetary Policy Spill-Over on FX Volatility

2020 ◽  
Vol 5 (1) ◽  
pp. 33-57
Author(s):  
Gábor Dávid Kiss ◽  
Mercédesz Mészáros
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Relative Size ◽  
Reducing Power ◽  
Central Banks ◽  
Gravity Models ◽  
Quantitative Easing ◽  
Subprime Crisis ◽  
European Central ◽  
Bank Balance Sheets

AbstractFollowing the subprime crisis, most of the European central banks implemented several unconventional monetary instruments. As a result of the late quantitative easing, there was a shift from stimulating lending to the immediate stimulation of the securities market in the monetary policy of the European Central Bank (ECB) and of the smaller central banks, too. These securities purchase programs, first and second-market transactions, and asset purchases have led to an increase in the stock of securities held by the central banks, whose spill-over effects have not been fully explored yet. The aim of our research is to identify the spill-over effects of the central banks’ unconventional instruments and quantitative easing on currency volatility while considering the relative size of the issuing central bank and the situation of small open economies. By running an adapted version of gravity models, we analyzed a sample of six European central banks and the ECB. Based on our results, the high volatility levels of European currencies around the eurozone have come from their relative smallness and unconventional monetary policy, and considerations about safe havens have a reducing power on F X volatility.

Europäische Zentralbank: kontraproduktive unkonventionelle Geldpolitik und der Euro-Wechselkurs / European Central Bank: counter-productive unconventional monetary policy and the exchange rate

ORDO ◽  
2014 ◽  
Vol 65 (1) ◽  
Author(s):  
Ansgar Belke
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Central Bank ◽  
European Central Bank ◽  
Quantitative Easing ◽  
Unconventional Monetary Policy ◽  
European Central ◽  
The Exchange Rate ◽  
Europäische Zentralbank

ZusammenfassungDie EZB sollte der Versuchung widerstehen, die Deflationsgefahr in der Eurozone durch zusätzliche Varianten unkonventioneller Geldpolitik (z.B. „Quantitative Easing“) zu bekämpfen. Was in den USA oder in Großbritannien geklappt haben mag, wird in der Eurozone nicht funktionieren. Es besteht gar die Gefahr einer Deflationsspirale, wie dieser Beitrag zeigt. Eingebettet werden die Argumente in die aktuelle Debatte um den „zu starken“ Euro.

scholarly journals Unconventional monetary policy of the European Central Bank: A brief recapitulation

2019 ◽  
Vol 53 (3) ◽  
pp. 43
Author(s):  
Ilona Skibińska-Fabrowska
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Central Bank ◽  
Economic Crisis ◽  
Financial Market ◽  
European Central Bank ◽  
Central Banks ◽  
Unconventional Monetary Policy ◽  
European Central ◽  
National Bank

<p>The financial and economic crisis that has hit many economies in recent years has significantly increased the activity of central banks. After using the standard instruments of conducting monetary policy, in view of the obstruction of monetary impulse transmission channels, they reached for non-standard instruments. Among them, asset purchase programs played a signifciant role. The European Central Bank (ECB) launched the largest asset purchase programme (APP) of this type in 2014 and expired in December 2018. The aim of the undertaken activities was to improve the situation on the financial market and stimulate economic growth. The article reviews the literature and results of research on the effects of the program and indicates the possibility of using the ECB’s experience in conducting monetary policy by the National Bank of Poland.</p>

scholarly journals Comparison of the Approach of the Czech National Bank and the European Central Bank to the Effects of the Global Financial Crisis

2021 ◽  
Vol 10 (2) ◽  
pp. 18-46
Author(s):  
Andrea Cecrdlova
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Financial Crisis ◽  
Central Bank ◽  
European Central Bank ◽  
Global Financial Crisis ◽  
Central Banks ◽  
European Central ◽  
National Bank ◽  
The Global Financial Crisis

The latest global crisis, which fully erupted in 2008, can have a significant impact on central banks credibility in the long run. During the last crisis, monetary authorities encountered zero interest rate levels and, as a result, started to use non-standard monetary policy instruments. The Czech National Bank decided to use a less standard instrument in November 2013, when it started to intervene on the foreign exchange market in order to keep the Czech currency at level 27 CZK / EUR. However, the European Central Bank also adopted a non-standard instrument, when chose a path of quantitative easing in 2015 in order to support the euro area economy by purchasing financial assets. The question remains whether the approach of Czech National Bank or the approach of European Central Bank in the crisis and post-crisis period was a more appropriate alternative. With the passage of time from the global financial crisis, it is already possible to compare the approaches of these two central banks and at least partially assess what approach was more appropriate under the given conditions. When comparing the central banks approaches to the crisis, the Czech National Bank was better, both in terms of the rate of interest rate cuts and the resulting inflation with regard to the choice of a non-standard monetary policy instrument. The recent financial crisis has revealed the application of moral hazard in practice, both on behalf of the European Central Bank and the Czech National Bank, which may have a significant impact on their credibility and independence in the coming years.

scholarly journals Análisis de la integración y dependencia de las políticas monetarias de la Unión Europea

2013 ◽  
pp. 47
Author(s):  
María del Carmen González Velasco ◽  
Roque Brinckmann
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Empirical Evidence ◽  
European Central Bank ◽  
Central Banks ◽  
Uncovered Interest Parity ◽  
European Central ◽  
Long Run ◽  
Bank Of England ◽  
Interest Parity

En este artículo se efectúa un análisis de la integración y dependencia de las políticas monetarias de la Unión Europea y, en concreto, de las políticas monetarias de la Unión Económica yMonetaria y de la zona no euro para el periodo comprendido entre Enero de 1999 y Septiembre 2009. Se aplica la metodología de la cointegración de Engle y Granger (1987) y de Johansen(1988) para contrastar la hipótesis de la paridad de tipos de interés no cubierta y se llega a la conclusión de que ambas políticas están cointegradas porque mantienen una relación de equilibrio a largo plazo. También se deduce una dependencia de la política del Banco de Inglaterra de la política del Banco Central Europeo, lo que confirma la importancia y el liderazgo de la Unión Económica y Monetaria.<br /><br />This study is to investigate the long-run relationship and dependence between the UME´s monetary policy and non-euro zone´s monetary policy for the period from January 4, 1999 to September 30, 2009. We use cointegration methodology to test the Uncovered Interest Parity Hypothesis and the results indicate a long-run cointegration and empirical evidence testifies a leader-follower pattern between the two central banks. According to this pattern, the Bank of England does follow the European Central Bank.

scholarly journals Análisis de la integración y dependencia de las políticas monetarias de la Unión Europea

2013 ◽  
pp. 47
Author(s):  
María del Carmen González Velasco ◽  
Roque Brinckmann
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Empirical Evidence ◽  
European Central Bank ◽  
Central Banks ◽  
Uncovered Interest Parity ◽  
European Central ◽  
Long Run ◽  
Bank Of England ◽  
Interest Parity

En este artículo se efectúa un análisis de la integración y dependencia de las políticas monetarias de la Unión Europea y, en concreto, de las políticas monetarias de la Unión Económica yMonetaria y de la zona no euro para el periodo comprendido entre Enero de 1999 y Septiembre 2009. Se aplica la metodología de la cointegración de Engle y Granger (1987) y de Johansen(1988) para contrastar la hipótesis de la paridad de tipos de interés no cubierta y se llega a la conclusión de que ambas políticas están cointegradas porque mantienen una relación de equilibrio a largo plazo. También se deduce una dependencia de la política del Banco de Inglaterra de la política del Banco Central Europeo, lo que confirma la importancia y el liderazgo de la Unión Económica y Monetaria.<br /><br />This study is to investigate the long-run relationship and dependence between the UME´s monetary policy and non-euro zone´s monetary policy for the period from January 4, 1999 to September 30, 2009. We use cointegration methodology to test the Uncovered Interest Parity Hypothesis and the results indicate a long-run cointegration and empirical evidence testifies a leader-follower pattern between the two central banks. According to this pattern, the Bank of England does follow the European Central Bank.

scholarly journals The price stability oriented monetary policy of the European Central Bank

2010 ◽  
Vol 13 (3) ◽  
pp. 5-15
Author(s):  
Wojciech Gasiński ◽  
Anna Misztal
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
European Central Bank ◽  
Central Banks ◽  
Primary Objective ◽  
Price Stability ◽  
Economic Policies ◽  
European Central ◽  
Consumer Prices ◽  
European System

The aim of this paper is to present the price stability oriented monetary policy of the European Central Bank. The European Central Bank began activities in 1998 and the primary objective of the European System of Central Banks is to maintain price stability and the ESCB should also support the general economic policies in the Community. Monetary policy is a special tool that national governments and central banks uses to influence on its economy, especially to control the supply of money and to influence on the level of economic indicators. This paper investigates the assumed objective of the European System of Central Banks which is to maintain price stability. What is more, we would like to present the monetary policy strategy of the European Central Bank and analysis of the Harmonized Index of Consumer Prices.

ECB to stay dovish despite ending its QE programme

2019 ◽  
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Central Banks ◽  
Financial Fragility ◽  
Gdp Growth ◽  
Quantitative Easing ◽  
Content Type ◽  
East European ◽  
European Central ◽  
Asset Backed Securities

Significance Fears of Europe's financial fragility are rising after the ECB ended its quantitative easing (QE) programme in December. The programme -- which lasted almost four years -- bought over 2.5 trillion euros (2.9 trillion dollars) in government, corporate and covered bonds, as well as asset-backed securities. Impacts GDP growth may pick up in the fourth quarter after idiosyncratic factors hit July-September, but GDP will struggle to build momentum. When the next cyclical downturn hits, fiscal policy will have to help monetary policy in supporting the economy. An ECB rate hike in 2019 would allow Central-East European central banks to hike too, curbing inflationary pressures.

The Decline of Simplicity and the Rise of Unorthodoxy

2017 ◽  
Author(s):  
Pierre L. Siklos
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Central Banks ◽  
Policy Uncertainty ◽  
Structural Factors ◽  
Balance Sheets ◽  
Advanced Economies ◽  
The World ◽  
Bank Balance Sheets ◽  
Clear Idea

Crises come in various forms, and their impact is not predicable with much accuracy. Crises in emerging markets are not the same as those in advanced economies. By 2007, the idea that monetary policy ought to be rules-based was widely accepted and copied around the world. Policymakers believed that inflation and macroeconomic slack were all that mattered. Demographic and structural factors were underappreciated. The wrong conclusions are now being drawn: rules should not be abandoned, but monetary policy can be improved. Monetary policy now relies more on words. An expansion of central bank balance sheets has taken place and central bank independence is a quaint idea. Central banks no longer influence just prices; they also change financial system quantities. This leads to rising policy uncertainty. Central banks stand accused of hubris, with little clear idea of the “new normal” and how this will redefine a future monetary policy strategy.

The quantitative easing effect on the stock market of the USA, the UK and Japan

2016 ◽  
Vol 43 (6) ◽  
pp. 1006-1021 ◽  
Author(s):  
Luiz Lima ◽  
Claudio Foffano Vasconcelos ◽  
Jose Simão ◽  
Helder Ferreira de Mendonça
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Stock Markets ◽  
Positive Impact ◽  
Central Banks ◽  
Quantitative Easing ◽  
Subprime Crisis ◽  
Content Type ◽  
The Usa ◽  
The Uk

Purpose The purpose of this paper is to analyze if the unconventional monetary policy, known as quantitative easing (QE) practiced by central banks in the USA, the UK, and Japan was effective to increase the market share after subprime crisis. Design/methodology/approach In order to analyze the effect of the QE on the stock markets of the USA, the UK, and Japan, the authors use an ARDL model to find the long-run relationship among the variables. Findings The findings denote that the QE implemented by the central banks in the USA, Japan, and the UK had a positive impact on their stock markets. Originality/value The results of the paper give some new insights about the conduction of monetary policy when the interest rates are close to zero.

Monetary policy and redistribution: information from central bank balance sheets in the Euro area and the US

2013 ◽  
Vol 64 (3) ◽  
Author(s):  
Philippine Cour-Thimann
Keyword(s):  
New York ◽  
Monetary Policy ◽  
Central Bank ◽  
Euro Area ◽  
Financial Sector ◽  
Central Banks ◽  
Balance Sheets ◽  
The Us ◽  
Bank Balance Sheets ◽  
Redistributive Effects

AbstractThe exceptional measures by central banks during the financial crisis have led to renewed interest in the redistributive effects of monetary policy. This paper adopts the perspective of central bank balance sheets to assess such effects. It uses information from the euro area National Central Banks and the US Federal Reserve Banks to analyse the regional and sectoral effects of monetary policy. Central bank balance sheets capture sustained imbalances in payment flows across the euro area countries that peaked at 10% of GDP in the so-called Target balances, and across the US districts that reached 5% of GDP in the equivalent Interdistrict Settlement Accounts. These imbalances, combined with accommodative central bank liquidity, shifted risks from the private financial sector to the public sector and among taxpayers - yet, mechanisms are in place to mitigate such risks and the associated redistributive effects. The liquidity injection, while directly channelled at the stressed regions or sectors, has indirectly supported the financial sector at large. In different institutional contexts, the financial centres in Germany and in the New York district have been strengthened. They have been net recipients of payment inflows from the rest of the respective currency areas, equivalent in amounts to a third of the liquidity injection during the crisis.

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