scholarly journals Large-Scale Asset Purchases by the Federal Reserve: Did They Work?

2011 ◽  
Author(s):  
Joseph Gagnon ◽  
Matthew Raskin ◽  
Julie Remache ◽  
Brian P. Sack
Keyword(s):  
Federal Reserve ◽  
Large Scale ◽  
Asset Purchases

scholarly journals Large-Scale Asset Purchases by the Federal Reserve: Did They Work?

2010 ◽  
Author(s):  
Joseph E. Gagnon ◽  
Matthew Raskin ◽  
Julie Remache ◽  
Brian P. Sack
Keyword(s):  
Federal Reserve ◽  
Large Scale ◽  
Asset Purchases

The non-linear effects of the Fed asset purchases

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Alessio Anzuini
Keyword(s):  
Financial Markets ◽  
Large Scale ◽  
Balance Sheet ◽  
Monetary Economics ◽  
American Economic Review ◽  
Vector Autoregressive ◽  
Portfolio Balance ◽  
State Dependent ◽  
Linear Effects ◽  
Asset Purchases

Abstract The Federal Reserve responded to the great financial crisis deploying new monetary policy tools, the most notable of which being the expansion of its balance sheet. In a recent paper, Weale, M., and T. Wieladek. 2016. “What Are the Macroeconomic Effects of Asset Purchases?” Journal of Monetary Economics 79 (C): 81–93 show that the asset purchases were effective in stimulating economic activity as well as inflation and asset prices. Here I show that their results are state dependent: large scale asset purchase are effective only when financial markets are impaired. Financial markets are under stress when the effective risk-bearing capacity of the financial sector is drastically reduced, i.e. when the excess bond premium (EBP) of Gilchrist, S., and E. Zakrajšek. 2012. “Credit Spreads and Business Cycle Fluctuations.” The American Economic Review 102 (4): 1692–72 exceed a certain threshold. Using an estimated threshold vector autoregressive model conditional on the EBP regime, I show that an increase in the balance sheet has expansionary effects on GDP and inflation when EBP is high, but not when it is low (as its effects become mostly insignificant). I argue that the high EBP can be interpreted as a proxy of market dis-functioning so that only when this channel of transmission is on, the unconventional policy is particularly effective. This suggests that models of transmission of unconventional policies, based on asset purchases, should focus also on the market functioning channel and not only on the portfolio balance one.

Optimizing Cash Management for Large Scale Bank Operations

2010 ◽  
Vol 1 (2) ◽  
pp. 17-31
Author(s):  
Mark Frost ◽  
Jeff Kennington ◽  
Anusha Madhavan
Keyword(s):  
Federal Reserve ◽  
Large Scale ◽  
Programming Model ◽  
Cash Management ◽  
Cost Component ◽  
Time Space ◽  
Currency Management ◽  
The Cost ◽  
Reserve System ◽  
Computational Solution

The Federal Reserve System (Fed) provides currency services to banks, including sorting currency into fit and non-fit bills and repackaging bills for redistribution. To reduce the cost of currency management operations, many banks make Fed deposits and withdrawals of the same denomination each week. In July 2007, the Fed introduced fees for making both deposits and withdrawals during a given Monday through Friday. Recognizing an opportunity, Fiserv Corporation initiated a project to optimize bank vault inventories across time and space. This article presents the integer programming model developed to assist Fiserv clients reduce the logistics cost component of cash management. The model is implemented in software using OPL. The underlying configuration is a time-space multi-commodity network with a fixed-charge cost structure. The authors report on a successful pilot study and present an efficient heuristic procedure that can be used to reduce computational solution times from hours to a few minutes.

Central Europe external risks still outweigh internal

2017 ◽  
Keyword(s):  
Mutual Funds ◽  
Central Europe ◽  
Federal Reserve ◽  
Political Crisis ◽  
Checks And Balances ◽  
Content Type ◽  
Political Risks ◽  
The Us ◽  
Asset Purchases ◽  
Law And Justice

Significance Investors are brushing off mounting political risks in Poland despite an erosion of democratic checks and balances under the nationalist Law and Justice (PiS) government. In Romania, despite the rapidly escalating political crisis, the leu has strengthened slightly against the euro since the start of this year, since when the yield on benchmark ten-year Romanian local bonds has risen by 25 bps to 3.6%. This is still significantly below the 5% level before the ‘taper tantrum’ in mid-2013, which stemmed from the unexpected decision by the US Federal Reserve (Fed) to end its asset purchases. Impacts After post-US election outflows, EM mutual funds are once again enjoying sizeable inflows, with EM debt funds reaching a four-month high. Some of the strain on EM currencies will be relieved by the 2.5% fall in the dollar index against a basket of its peers since end-December. Smaller export-led CEE economies will benefit from factory orders in Germany rising in December at their fastest pace in 30 months.

scholarly journals UNCONVENTIONAL MEASURES OF MONETARY POLICY: EXPERIENCE OF THE FEDERAL RESERVE SYSTEM OF THE UNITED STATES

2017 ◽  
Vol 16 (3 (2017)) ◽  
pp. 341-364
Author(s):  
Oleksandr Dzyublyuk
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Federal Reserve ◽  
Large Scale ◽  
Banking System ◽  
The United States ◽  
Sustainable Growth ◽  
Unconventional Monetary Policy ◽  
Wide Range ◽  
Strategic Goals

The preconditions, causes and peculiarities of the global financial and economic crisis created the basis for the withdrawal of central banks from their traditional limited range of instruments of monetary influence on the economy and the transition to the active use of unconventional monetary policy measures. The Federal Reserve was the first central bank which used the unconventional measures of monetary policy as a key factor in overcoming the recession and bringing the US economy to a sustainable growth path. The traditional instruments of monetary regulation during the period of aggravation of financial crisis on the money markets turned out complete ineffective, that had the destructive consequences for the economy. That is why so important is the analysis of the reasons for this ineffectiveness and the necessity of use of unconventional instruments. The practical mechanism of using such unconventional instruments of the Fed includes such as large-scale asset purchases and FOMC’s forward guidance about intentions. And it is hard to underestimate the role of these tools in the withdrawal of the American economy from the state of recession. Also important are innovative credit policy programs that have been used by the Federal Reserve during the period of growing crisis, in terms of increasing the effective ness of its impact on the financial stabilization of the banking system, providing markets with liquidity and stimulating domestic demand. The use of unconventional monetary policy instruments aims to achieve a wide range of strategic goals that include not only price stability but also economic growth and low unemployment. Thus, based on the powerful influence of the Fed’s monetary policy on the dynamics of the main economic parameters, it is expedient to apply a dual mandate in formulating the strategic goals of the central bank.

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