Monetary policy operations and the financial system:
Since 2007, central banks of industrialized countries have counteracted financial instability, recession, and deflationary risks with unprecedented monetary policy operations. While generally regarded as successful, these measures also led to an exceptional increase in the size of central bank balan...
Gespeichert in:
| 1. Verfasser: | |
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| Format: | Buch |
| Sprache: | English |
| Veröffentlicht: |
Oxford
Oxford Univ. Press
2014
|
| Ausgabe: | 1. ed. |
| Schlagworte: | |
| Online-Zugang: | Inhaltsverzeichnis |
| Zusammenfassung: | Since 2007, central banks of industrialized countries have counteracted financial instability, recession, and deflationary risks with unprecedented monetary policy operations. While generally regarded as successful, these measures also led to an exceptional increase in the size of central bank balance sheets. The book first introduces the subject by explaining monetary policy operations in normal times, including the key instruments (open market operations, standing facilities, reserve requirements, and the collateral framework). Second, the book reviews the basic mechanics of financial crises as they have hit economies many times. The book then explains what central banks need to do to when financial markets and banks are impaired to fulfil their monetary policy and financial stability mandates. Besides demonstrating the need for non-conventional monetary policy measures, the book also highlights their dangers, such as moral hazard and increased central bank risk taking. The book draws a number of lessons from the crisis on non-conventional monetary policy operations, assessing what measures have worked well, and how a framework should be designed in future normal times such as to contribute to make financial crises less likely. Central bank monetary policy operations have traditionally been considered as a matter of practice, while the macroeconomic modelling of the transmission mechanism of monetary policy is regarded as a discipline relying on substantial theory ('monetary economics'). However, monetary policy operations can equally benefit from a theory, and from a normative framework to guide policy choices. |
| Beschreibung: | XIII, 320 S. graph. Darst. |
| ISBN: | 9780198716907 0198716907 |
Internformat
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| 100 | 1 | |a Bindseil, Ulrich |d 1969- |e Verfasser |0 (DE-588)114189935 |4 aut | |
| 245 | 1 | 0 | |a Monetary policy operations and the financial system |c Ulrich Bindseil |
| 250 | |a 1. ed. | ||
| 264 | 1 | |a Oxford |b Oxford Univ. Press |c 2014 | |
| 300 | |a XIII, 320 S. |b graph. Darst. | ||
| 336 | |b txt |2 rdacontent | ||
| 337 | |b n |2 rdamedia | ||
| 338 | |b nc |2 rdacarrier | ||
| 520 | |a Since 2007, central banks of industrialized countries have counteracted financial instability, recession, and deflationary risks with unprecedented monetary policy operations. While generally regarded as successful, these measures also led to an exceptional increase in the size of central bank balance sheets. The book first introduces the subject by explaining monetary policy operations in normal times, including the key instruments (open market operations, standing facilities, reserve requirements, and the collateral framework). Second, the book reviews the basic mechanics of financial crises as they have hit economies many times. The book then explains what central banks need to do to when financial markets and banks are impaired to fulfil their monetary policy and financial stability mandates. Besides demonstrating the need for non-conventional monetary policy measures, the book also highlights their dangers, such as moral hazard and increased central bank risk taking. The book draws a number of lessons from the crisis on non-conventional monetary policy operations, assessing what measures have worked well, and how a framework should be designed in future normal times such as to contribute to make financial crises less likely. Central bank monetary policy operations have traditionally been considered as a matter of practice, while the macroeconomic modelling of the transmission mechanism of monetary policy is regarded as a discipline relying on substantial theory ('monetary economics'). However, monetary policy operations can equally benefit from a theory, and from a normative framework to guide policy choices. | ||
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Datensatz im Suchindex
| _version_ | 1804152305663082496 |
|---|---|
| adam_text | Contents
List of Figures
ix
List of Tables
xiv
List of Abbreviations
xv
Introduction and Overview
1
Part I: Monetary Policy Operations in Normal Times
1.
Basic Terminology and Relationship to Monetary Macroeconomics
9
1.1
Key Concepts and Terminology
9
1.2
Dichotomy Between Monetary Macroeconomics and Monetary
Policy Implementation in Normal Times
11
2.
Representing Monetary Policy Operations in Financial Accounts
15
2.1
Introduction to the Financial Accounts Model
15
2.2
Deposit Shifts between Individual Banks and the
Interbank Market
19
2.3
Collateral Constraints
22
2.4
Reserves of Banks with the Central Bank and
Required Reserves
23
2.5
Other Autonomous Factors and Types of Monetary Policy
Operations
24
2.6
Liquidity Deficit of the Banking System
vis-à-vis
the
Central Bank
28
2.7
Credit Money Created by Banks
30
2.8
The Real Euro Area Financial Accounts
34
3.
Operational Target of Monetary Policy
36
3.1
Concept of an Operational Target of Monetary Policy
36
3.2
Short-term Rate as Operational Target of Monetary Policy
38
3.3
Quantity-oriented Operational Targets of Monetary
Policy in the Twentieth Century—A Brief History
43
4.
Three Basic Techniques to Control Short-term Interest Rates
51
4.1
One-directional Standing Facility-based Monetary Policy
Implementation
51
4.2
Symmetric Corridor Approach with Open Market Operations
Volume Set by the Central Bank
54
4.3
Full Allotment Open Market Operations within a Corridor Set
by Standing Facilities
59
vi
Contents
5.
Several Liquidity Shocks, Averaging, and the Martingale Property of
Overnight Rates
62
5.1
Three Shocks and Three Trading Sessions on One Day
62
5.2
Three-day Reserve Maintenance Period with Averaging
66
6.
Standing Facilities and the Interest Rate Corridor
70
6.1
Types of Standing Facilities and History
70
6.2
Optimal Width of the Corridor Set by Standing Facilities in the
Symmetric Corridor Approach
73
6.3
Idea of a Target Rate—Limited Access5 (Taralac) Facility
80
7.
Open Market Operations in Normal Times
84
7.1
Origins and History
84
7.2
Open Market Operations as Determinants of the Monetary
Policy Implementation Approach
86
7.3
Tender Procedure for Credit Open Market Operations
89
7.4
Liquidity-absorbing Open Market Operations
93
8.
Reserve Requirements
96
8.1
Introduction
96
8.2
Basic Specifications of Reserve Requirements
97
8.3
Key Functions of Reserve Requirements (Including Historical)
99
9.
Collateral
108
9.1
Importance of the Collateral Framework for Monetary Policy
Implementation
108
9.2
Logic of Establishing a Collateral Framework
112
9.3
Risk Management Techniques
115
9.4
Market Impact of the Collateral Framework and Collateral as
Monetary Policy Instrument
119
9.5
Segregation of Collateral Sets, Adverse Selection in Collateral
Use, and Pricing
127
10.
Optimal Monetary Policy Operations Frameworks in
Normal Times
130
10.1
Hundred Ways to Skin a Cat
130
10.2
Potential Objectives of the Design and Use of the Monetary
Policy Implementation Framework
130
10.3
Statements of Central Banks on their
Objectives and Principles
133
10.4
Four Examples of Frameworks
135
10.5
Conclusions
140
Contents
vii
Part II: Monetary Policy Operations in Times of Crisis
11.
The Mechanics of Liquidity Crises
145
11.1
Introduction
145
11.2
Increased Credit Risk, Adverse Selection, and Funding
Market Breakdown
147
11.3
Bank Runs and Investor Strikes
153
11.4
Increase of Margin
161
11.5
Asset Liquidity in a Market Maker Model
165
11.6
Asset Fire Sales
167
11.7
Interaction Between Crisis Channels
168
11.8
lhe
Role of the Central Bank: Monetary Policy and LOLR
170
12.
Collateral Availability and Monetary Policy
179
12
Л
Collateral Scarcity and Effective Term Funding Costs of Banks
180
12.2
Collateral Scarcity, Stigma, and the Control of the
Overnight Rate
189
12.3
The Asset Encumbrance Problem
193
12.4
The Bank Run Problem and Central Bank Collateral
197
12.5
Securities Lending Programmes by Central Banks
200
13.
Open Market Operations and Standing Facilities
203
13.1
The Use and Width of the Standing Facilities Corridor
203
13.2
Adjusting Credit Open Market Operations
215
13.3
Outright Purchase Programmes
219
13.4
Dangers of Too Accommodating Policies
228
Annex: Central Bank Balance Sheets during the Crisis
230
14.
The Central Bank as Lender of Last Resort (LOLR)
235
14.1
The Nineteenth-century Heritage
235
14.2
Why Should Central Banks Be Lender of Last Resort?
236
14.3
Central Bank Inertia and Beyond
240
14.4
Emergency Liquidity Assistance as Special Type of LOLR
242
15.
LOLR and Central Bank Risk-Taking
248
15.1
Exogenous Risk
248
15.2
Endogenous Risk
252
16.
LOLR, Moral Hazard, and Liquidity Regulation
264
16.1
Moral Hazard and Negative Externalities of Inadequate
Bank Liquidity Management
264
16.2
Liquidity Regulation
267
16.3
A Framework with Financial Incentives against
Disproportional
Reliance on the Central Bank
275
viii Contents
17.
The International
Lender of Last
Resort
280
17.1
The Case of a Fixed Exchange Rate System
280
172
Provision of Foreign Currency by Central Banks to Domestic
Counterparties in
2009-2013 285
Annex A: Current Account Transactions as Origin of Foreign
Reserves
289
Annex B: TARGET2 Balances in the Euro Area
289
18.
Optimal Monetary Policy Operations in Crisis Times
294
References
299
Index
315
|
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| classification_rvk | QC 320 QK 900 |
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| dewey-ones | 330 - Economics |
| dewey-raw | 330 |
| dewey-search | 330 |
| dewey-sort | 3330 |
| dewey-tens | 330 - Economics |
| discipline | Wirtschaftswissenschaften |
| edition | 1. ed. |
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| id | DE-604.BV041930989 |
| illustrated | Illustrated |
| indexdate | 2024-07-10T01:08:36Z |
| institution | BVB |
| isbn | 9780198716907 0198716907 |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-027374293 |
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| spelling | Bindseil, Ulrich 1969- Verfasser (DE-588)114189935 aut Monetary policy operations and the financial system Ulrich Bindseil 1. ed. Oxford Oxford Univ. Press 2014 XIII, 320 S. graph. Darst. txt rdacontent n rdamedia nc rdacarrier Since 2007, central banks of industrialized countries have counteracted financial instability, recession, and deflationary risks with unprecedented monetary policy operations. While generally regarded as successful, these measures also led to an exceptional increase in the size of central bank balance sheets. The book first introduces the subject by explaining monetary policy operations in normal times, including the key instruments (open market operations, standing facilities, reserve requirements, and the collateral framework). Second, the book reviews the basic mechanics of financial crises as they have hit economies many times. The book then explains what central banks need to do to when financial markets and banks are impaired to fulfil their monetary policy and financial stability mandates. Besides demonstrating the need for non-conventional monetary policy measures, the book also highlights their dangers, such as moral hazard and increased central bank risk taking. The book draws a number of lessons from the crisis on non-conventional monetary policy operations, assessing what measures have worked well, and how a framework should be designed in future normal times such as to contribute to make financial crises less likely. Central bank monetary policy operations have traditionally been considered as a matter of practice, while the macroeconomic modelling of the transmission mechanism of monetary policy is regarded as a discipline relying on substantial theory ('monetary economics'). However, monetary policy operations can equally benefit from a theory, and from a normative framework to guide policy choices. Geldpolitik (DE-588)4019902-2 gnd rswk-swf Notenbankpolitik (DE-588)4130528-0 gnd rswk-swf Geldpolitik (DE-588)4019902-2 s Notenbankpolitik (DE-588)4130528-0 s DE-604 Digitalisierung UB Passau - ADAM Catalogue Enrichment application/pdf http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=027374293&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA Inhaltsverzeichnis |
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| subject_GND | (DE-588)4019902-2 (DE-588)4130528-0 |
| title | Monetary policy operations and the financial system |
| title_auth | Monetary policy operations and the financial system |
| title_exact_search | Monetary policy operations and the financial system |
| title_full | Monetary policy operations and the financial system Ulrich Bindseil |
| title_fullStr | Monetary policy operations and the financial system Ulrich Bindseil |
| title_full_unstemmed | Monetary policy operations and the financial system Ulrich Bindseil |
| title_short | Monetary policy operations and the financial system |
| title_sort | monetary policy operations and the financial system |
| topic | Geldpolitik (DE-588)4019902-2 gnd Notenbankpolitik (DE-588)4130528-0 gnd |
| topic_facet | Geldpolitik Notenbankpolitik |
| url | http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=027374293&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA |
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