Lending-of-Last-Resort is as Lending-of-Last-Resort Does: Central Bank Liquidity Provision and Interbank Market Functioning in the Euro Area

The regime complex for crisis finance in the euro area included the European Council, Council of the European Union, and Eurogroup in addition to the three institutions of the troika. As the member states acted largely, though not exclusively, through the council system, these bodies stood at the center of the institutional mix. This chapter reviews the institutions as a prelude to examining the dilemmas that confronted them over the course of the crises. It presents a brief review of some of the basic facts about their origins, membership, and organization. Each section then delves more deeply into these institutions’ governance and principles to understand their capabilities and strategic challenges. As a consequence of different mandates and design, the European Commission, European Central Bank, and International Monetary Fund diverged with respect to their approach to financing, adjustment, conditionality, and debt sustainability. This divergence set the stage for institutional conflict in the country programs.

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Reactions of Euro Area Government Yields to Covid-19 Related Policy Measure Announcements by the European Commission and the European Central Bank

Finance Research Letters ◽

10.1016/j.frl.2020.101917 ◽

2020 ◽

pp. 101917

Author(s):

Ralf Fendel ◽

Frederik Neugebauer ◽

Lilli Zimmermann

Keyword(s):

Central Bank ◽

European Commission ◽

Euro Area ◽

European Central Bank ◽

Policy Measure ◽

European Central

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Modeling Sources of Asymmetry in the Volatility of the Moroccan Dirham Exchange Rate

Applied Economics and Finance ◽

10.11114/aef.v8i4.5232 ◽

2021 ◽

Vol 8 (4) ◽

pp. 31

Author(s):

KHATTAB Ahmed ◽

SALMI Yahya

Keyword(s):

Exchange Rate ◽

Central Bank ◽

Exchange Rates ◽

Foreign Exchange ◽

Selection Criterion ◽

Econometric Models ◽

Interbank Market ◽

Foreign Exchange Reserves ◽

Central Bank Intervention ◽

The Exchange Rate

The main objective of this paper is to study the sources of asymmetry in the volatility of the bilateral exchange rates of the Moroccan dirham (MAD), against the EUR and the USD using the asymmetric econometric models of the ARCH-GARCH family. An empirical analysis was conducted on daily central bank data from March 2003 to March 2021, with a sample size of 4575 observations. Central bank intervention in the foreign exchange (interbank) market was found to affect the asymmetry in the volatility of the bilateral EUR/MAD and USD/MAD exchange rates. Specifically, sales of foreign exchange reserves by the monetary authority cause a fall in the exchange rate, which means that the market response to shocks is asymmetric. Finally, the selection criterion (AIC) allowed us to conclude that the asymmetric model AR(1)-TGARCH(1,1) is adequate for modeling the volatility of the exchange rate of the Moroccan dirham.

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