Monetary Policy and Balance Sheets

2013 ◽  
Author(s):  
Deniz Igan ◽  
Alain Kabundi ◽  
Francisco Nadal-De Simone ◽  
Natalia T. Tamirisa
Keyword(s):  
Monetary Policy ◽  
Balance Sheets

Monetary policy in a dollarized economy where balance sheets matter

2001 ◽  
Vol 66 (2) ◽  
pp. 445-464 ◽  
Author(s):  
Roberto Chang ◽  
Andrés Velasco
Keyword(s):  
Monetary Policy ◽  
Balance Sheets

scholarly journals MONETARY POLICY, HOUSING BOOMS, AND FINANCIAL (IM)BALANCES

2012 ◽  
Vol 17 (4) ◽  
pp. 830-860 ◽  
Author(s):  
Sandra Eickmeier ◽  
Boris Hofmann
Keyword(s):  
Monetary Policy ◽  
Private Sector ◽  
Global Financial Crisis ◽  
House Prices ◽  
Monetary Policy Shocks ◽  
Balance Sheets ◽  
Vector Autoregressive ◽  
Policy Shocks ◽  
The Global Financial Crisis

This paper applies a factor-augmented vector autoregressive model to U.S. data with the aim of analyzing monetary transmission via private sector balance sheets, credit risk spreads, and house prices and of exploring the role of monetary policy in the housing and credit boom prior to the global financial crisis. We find that monetary policy shocks have a persistent effect on house prices, real estate wealth, and private sector debt and a strong short-lived effect on risk spreads in money and mortgage markets. Moreover, the results suggest that monetary policy contributed considerably to the unsustainable precrisis developments in housing and credit markets. Although monetary policy shocks contributed discernibly at a late stage of the boom, feedback effects of other (macroeconomic and financial) shocks via lower policy rates kicked in earlier and appear to have been considerable.

What Do a Million Observations on Banks Say About the Transmission of Monetary Policy?

2000 ◽  
Vol 90 (3) ◽  
pp. 407-428 ◽  
Author(s):  
Anil K Kashyap ◽  
Jeremy C Stein
Keyword(s):  
Monetary Policy ◽  
Bank Lending ◽  
Monetary Transmission ◽  
Bank Lending Channel ◽  
Data Set ◽  
Balance Sheets ◽  
Lending Channel ◽  
The Impact ◽  
Transmission Of Monetary Policy ◽  
Quantitative Importance

We study the monetary-transmission mechanism with a data set that includes quarterly observations of every insured U.S. commercial bank from 1976 to 1993. We find that the impact of monetary policy on lending is stronger for banks with less liquid balance sheets—i.e., banks with lower ratios of securities to assets. Moreover, this pattern is largely attributable to the smaller banks, those in the bottom 95 percent of the size distribution. Our results support the existence of a “bank lending channel” of monetary transmission, though they do not allow us to make precise statements about its quantitative importance. (JEL E44, E52, G32)

scholarly journals Global Stablecoins: Monetary Policy Implementation Considerations from the U.S. Perspective

2021 ◽  
Vol 2021 (020) ◽  
pp. 1-14
Author(s):  
Matthew Malloy ◽  
◽  
David Lowe ◽  
Keyword(s):  
Monetary Policy ◽  
Policy Implementation ◽  
Banking Sector ◽  
Balance Sheet ◽  
Financial Sector ◽  
The United States ◽  
Cash Flows ◽  
Commercial Banking ◽  
Balance Sheets ◽  
Bank Reserves

This note explores the potential effects of the widespread adoption of a global stablecoin (GSC) on key aggregate financial sector balance sheets in the United States. To do this, we map out cash flows of GSC transactions among financial sector entities using a stylized set of 't-accounts'. By analyzing these individual transactions, we infer aggregate and compositional effects on U.S. commercial banking sector and Federal Reserve balance sheets. Through this lens, we also consider how these balance sheet changes could affect monetary policy implementation, the demand for central bank reserves, and the market for U.S. dollar safe assets.

Book Reviews

2017 ◽  
Vol 55 (1) ◽  
pp. 222-225
Keyword(s):  
Monetary Policy ◽  
Low Income ◽  
Central Banks ◽  
Low Income Countries ◽  
Balance Sheets ◽  
Flow Of Funds ◽  
Monetary Analysis ◽  
Policy Frameworks ◽  
Bank Of England

Bilin Neyapti of Bilkent University reviews “Monetary Analysis at Central Banks,” edited by David Cobham. The Econlit abstract of this book begins: “Four papers investigate how analysis of monetary and credit aggregates is used in modern central banks and how that analysis feeds through into policy making. Papers discuss monetary analysis and central banks (David Cobham); the analysis of money and credit during the financial crisis--the approach at the Bank of England (Jon Bridges, James Cloyne, Ryland Thomas, and Alex Tuckett); central banks as balance sheets of last resort--the European Central Bank's monetary policy in a flow-of-funds perspective (Philippine Cour-Thimann and Bernhard Winkler); and evolving monetary policy frameworks in low-income countries--the Tanzanian experience (Christopher Adam, Pantaleo Kessy, and Ben Langford).”

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.

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