Bad Sovereign or Bad Balance Sheets? Euro Interbank Market Fragmentation and Monetary Policy, 2011-2015

2018 ◽  
Author(s):  
Silvia Gabrieli ◽  
Claire Labonne
Keyword(s):  
Monetary Policy ◽  
Interbank Market ◽  
Balance Sheets ◽  
Market Fragmentation

scholarly journals Monetary Policy and Cross-Border Interbank Market Fragmentation: Lessons from the Crisis

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Tobias S. Blattner ◽  
Jonathan M. Swarbrick
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Financial Structure ◽  
Real Economy ◽  
Interbank Market ◽  
Cross Border ◽  
Market Fragmentation ◽  
Initial Shock ◽  
Asset Purchases

AbstractWe present a two-country model featuring risky lending and cross-border interbank market frictions. We find that (i) the strength of the financial accelerator, when applied to banks operating under uncertainty in an interbank market, will critically depend on the economic and financial structure of the economy; (ii) adverse shocks to the real economy can be the source of banking crisis, causing an increase in interbank funding costs, aggravating the initial shock; and (iii) asset purchases and central bank long-term refinancing operations can be effective substitutes for, or supplements to, conventional monetary policy.

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

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

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.

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