Download or read book Assessing the Impact of the ECB s Monetary Policy on the Stock Markets a Sectoral View written by Konstantin A. Kholodilin (Economiste.) and published by . This book was released on 2008 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Euro Area Policies written by International Monetary Fund. Monetary and Capital Markets Department and published by International Monetary Fund. This book was released on 2018-07-19 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: The flexibility shown by the ECB/Eurosystem in adapting its framework, as required by circumstances, has helped improve funding and liquidity conditions. Compared to the situation pre-crisis, the ECB/Eurosystem has provided liquidity against a broader range of collateral and for as long as four years in terms of maturity; extended liquidity in foreign currency; conducted outright purchases of public and private sector assets (now tapering off); and reduced interest rates into negative territory. In these arrangements, policy is directed from the center, but is implemented mostly by the National Central Banks (NCBs); risks are largely shared. Market participants are complimentary about the role the ECB/Eurosystem has played in backstopping the financial system and its forward guidance on monetary policy.

Download or read book Euro Area Policies written by International Monetary Fund. Monetary and Capital Markets Department and published by International Monetary Fund. This book was released on 2018-07-19 with total page 342 pages. Available in PDF, EPUB and Kindle. Book excerpt: The SSM (SSM) has made a solid start. Set up a little over three years ago, the SSM has developed into a coherent banking supervision mechanism operating across the 19 Euro Area Member States. Banking supervision at the European Central Bank (ECB) is underpinned by a clear mandate and independence from government or industry interference in individual supervisory decisions. Its well-defined supervisory methodology and processes—complemented by committed staff—have laid the foundations for more forward-looking, pre-emptive, and evenhanded supervision. This is a noteworthy achievement for the Euro Area.

Download or read book The Impact of ECB Monetary Policy on Stock and Bond Market Liquidity The Case of Germany written by Terence Kappeln and published by GRIN Verlag. This book was released on 2016-01-18 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: Bachelor Thesis from the year 2015 in the subject Economics - Finance, grade: 1,0, Vienna University of Economics and Business (Finance and Accounting), language: English, abstract: During the financial crisis and the following Eurozone crisis, liquidity in financial markets basically froze and became a problem for the real economy. Therefore, market liquidity became one of the major concerns of the ECB, which applied non-standard measures, e.g. irregular asset purchasing programmes. This paper sheds light on the impact of monetary policy on liquidity levels of the DAX 30 equity index and German 10-year government bonds. For the following analysis, the monetary policy impacts are estimated using the base money growth rate and EONIA rate, whereas the relative bid-ask spread is employed for measuring liquidity levels. The research method includes literature-based research about common market liquidity theories, a short timeline of important ECB monetary policy decisions, descriptive statistics on liquidity levels and monetary policy variables and a VAR analysis, including variables spreads, returns, volatilities, industrial production and inflation. The results indicate that a decrease (increase) in stock market liquidity or an increase (decrease) in bondmarket volatility lead to a decrease (increase) of EONIA. Furthermore, decreases (increases) in stock return or industrial production result in a decrease (increase) of EONIA. However, base money growth is positively correlated only to changes in bond market volatility. Overall, the results suggest that the monetary policy decisions by the ECB are influenced by changing market conditions without the ability to forecast liquidity levels.

Download or read book The European Central Bank written by D. Howarth and published by Springer. This book was released on 2003-05-14 with total page 292 pages. Available in PDF, EPUB and Kindle. Book excerpt: David Howarth and Peter Loedel provide a theoretically inspired account of the creation, design and operation of the European Central Bank. Issues explored include the theoretical approaches to the ECB, the antecedents of European monetary authority, the different national perspectives on central bank independence, the complex organisation of the bank, the issues of accountability and the difficult first years of the ECB in operation.

Download or read book European Union written by International Monetary Fund. Monetary and Capital Markets Department and published by International Monetary Fund. This book was released on 2014-02-11 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper discusses key findings of the detailed assessment of implementation of the European Central Bank (ECB) Observance of the Committee on Payment and Settlement Systems/International Organization of Securities Commission (CPSS-IOSCO) responsibilities of authorities for financial market infrastructures. The oversight framework of the ECB is comprehensive. The ECB has developed a wide-ranging oversight policy, including quantitative and qualitative criteria to identify, monitor, and remedy any potential systemic risks related to financial market infrastructures. It has also developed oversight standards covering a broad range of infrastructures, service providers, and payment schemes within the euro area.

Download or read book Stock Market Sensitivity to Monetary Policy Shocks written by and published by . This book was released on 2007 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Inflation Expectations written by Peter J. N. Sinclair and published by Routledge. This book was released on 2009-12-16 with total page 402 pages. Available in PDF, EPUB and Kindle. Book excerpt: Inflation is regarded by the many as a menace that damages business and can only make life worse for households. Keeping it low depends critically on ensuring that firms and workers expect it to be low. So expectations of inflation are a key influence on national economic welfare. This collection pulls together a galaxy of world experts (including Roy Batchelor, Richard Curtin and Staffan Linden) on inflation expectations to debate different aspects of the issues involved. The main focus of the volume is on likely inflation developments. A number of factors have led practitioners and academic observers of monetary policy to place increasing emphasis recently on inflation expectations. One is the spread of inflation targeting, invented in New Zealand over 15 years ago, but now encompassing many important economies including Brazil, Canada, Israel and Great Britain. Even more significantly, the European Central Bank, the Bank of Japan and the United States Federal Bank are the leading members of another group of monetary institutions all considering or implementing moves in the same direction. A second is the large reduction in actual inflation that has been observed in most countries over the past decade or so. These considerations underscore the critical – and largely underrecognized - importance of inflation expectations. They emphasize the importance of the issues, and the great need for a volume that offers a clear, systematic treatment of them. This book, under the steely editorship of Peter Sinclair, should prove very important for policy makers and monetary economists alike.

Download or read book ECB Monetary Policy and Commodity Prices written by Shahriyar Aliyev and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the impact of the ECB monetary policies on global aggregate and sectoral commodity prices using monthly data from January 2001 till August 2019. We employ a SVAR model and assess separately period of conventional monetary policy before global financial crisis (GFC) and unconventional monetary policy during post-crisis period. Our key results indicate that contractionary monetary policy shocks have positive effects on the aggregate and sectoral commodity prices during both conventional and unconvetional monetary policy periods. The effect is statistically significant for aggregate commodity prices during post-crisis period. In terms of sectoral impact, the effect is statistically significant for food prices in both periods and for fuel prices during post-crisis period; other commodities display positive but statistically insignificant responses. Further, we demonstrate that the impact of the ECB monetary policy on commodity prices increased remarkably after the GFC. Our results also suggest that the effect of the ECB monetary policy on commodity prices does not transmit directly through market demand and supply expectations channel, but rather through the exchange rate channel that influences the European market demand directly.

Download or read book The Federal Reserve System Purposes and Functions written by Board of Governors of the Federal Reserve System and published by . This book was released on 2002 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.

Download or read book Essays on the ECB Monetary Policy s Impact on Non Financial Firms written by Lior Cohen and published by . This book was released on 2020 with total page 145 pages. Available in PDF, EPUB and Kindle. Book excerpt: "In recent years, one of the main problems the European Economic and Monetary Union (EMU) has been facing is slow economic growth stemming, in part, from subdued investments despite interest rates falling below the zero-lower bound (ZLB). Summers (2013) brought back the term "secular stagnation" - first coined by Hansen (1939) - to describe the United States' economic environment following the 2008-2009 Great Recession, in which a central bank is unable to reduce interest rates enough to stimulate investment and consumption. In recent years, another term, "liquidity trap", has also gained popularity to characterize an economy where short-term interest rates are at the ZLB, and in effect, rendering conventional monetary policy incapable of stimulating growth. Indeed, this topic has fostered extensive research on ways unconventional monetary policies could stimulate an economy (see, for example, Dominguez et al. (1998), Bernanke et al. (2004), and Eggertsson and Krugman (2012)). The European Central Bank (ECB) has been trying to ameliorate financial conditions and restore confidence in the EMU, especially after the 2011-2012 Euro Debt crisis. On July 26th, 2012 the then President of the ECB, Mario Draghi, stated the most important three words ever uttered by a central banker that he was going to do "whatever it takes" to save the Euro. Since then, the ECB has introduced an array of conventional and unconventional monetary policies to maintain the EMU project. Some of these policies include slashing interest rates below the ZLB, implementing the longer-term refinancing operations (LTRO), and targeted longer-term refinancing operations (TLTRO), and introducing quantitative easing (QE). However, were these policies successful in encouraging investment and easing financial conditions? In this thesis, we try to answer this question from the perspective of non-financial firms. The analysis of the ECB's unconventional policies - mainly of QE - has been widely researched, especially their effect on borrowing costs in general and government bond yields in particular (see Albu et al. (2014), De Santis (2020), Jäger and Grigoriadis (2017), and Krishnamurthy et al. (2017), among others). However, the research on corporations has been somewhat limited, although non-financial corporations (NFCs) are a vital sector, particularly for investments. In this thesis, we focus on the ECB's interest rate policy and its QE programmes, especially the public sector purchase programme (PSPP), and the corporate sector purchase programme (CSPP).The PSPP, first introduced on January 22nd, 2015, aimed to lower long-term sovereign bond yields by purchasing sovereign debt at an average pace of 47 billion euros a month from March 2015 to December 2018 . In total, the ECB purchased over 2.2 trillion euros worth of government bonds of EMU countries. This asset purchase programme accounted for 47% of ECB's balance sheet. Another vital purchase programme was the CSPP. Under this program, the ECB purchased NFC debt at a monthly pace of 5.8 billion euros from June 2016 to December 2018 for a total of 178-billion-euro worth of European corporate bonds. This programme's goal was to lower NFCs' borrowing costs and to induce corporate borrowing and investment spending.This thesis consists of three independent chapters, albeit with an overarching theme of investigating the impact of ECB's policies on NFCs. In Chapter 2, titled Has ECB's monetary policy prompted NFCs to invest, or pay dividends?, we take a broad view of the influence of the ECB's conventional and unconventional policies on NFCs' decisions on debt holdings, investments, and dividends. Toward this end, we use a unique dataset comprised of income statements and balance sheets of leading NFCs' operating in the EMU from the four largest economies, Germany, France, Italy, and Spain. Chapter 2 contributes to the literature by shedding light on the ECB monetary policies' long-term effect on NFCs' leverage and capital allocation - subjects that, to the best of our knowledge, have yet to be methodically investigated over such an extended period and encompasses the ECB's unconventional policies. The main results in Chapter 2 suggest that the ECB's monetary policies have encouraged firms to raise their debt burden, especially after the global recession of 2008. The ECB's policies, particularly after 2011, also seem to have led NFCs to allocate more resources not only to capital spending but also to shareholder distribution.Chapter 3, titled Examining the effect of ECB monetary policy on non-financial corporations' credit risk premia examines the usefulness of the ECB's policies in ameliorating financial conditions and reducing the risk premia of NFCs. We collected daily credit default swaps (CDSs) prices of publicly-traded European NFCs to analyze the short-term effects of the policy announcements between June 2nd, 2014, and December 30th, 2016. We also test the long-term impact of the ECB's policies on NFCs' CDS prices using monthly data from January 2008 to February 2018. Chapter 3 contributes to the literature by being the first to methodically investigate the mechanism of the ECB's monetary policy's short-term and long-term impact on NFCs' CDS prices. By doing so, we assess the ECB's various policies' transmission mechanism to NFCs' risk premia - a critical factor in NFCs' borrowing costs. The main findings in Chapter 3 are that the ECB's asset purchase programme announcements seem to have an immediate impact on CDS daily prices; these announcements had a stronger effect, especially after the PSPP started in March 2015. From 2008 to 2012 and from 2015 to 2018, the ECB's interest rate policy had statistically and economically significant effects in reducing CDS prices. We also find that some of ECB's asset purchase programmes, such as the PSPP, had a statistically significant long-term impact on CDSs. These findings indicate that some of the ECB's policies were effective in reducing NFCs' risk premia, notably since 2015, as market conditions improved. In Chapter 4, titled Bang for the QE buck: Examining the impact of ECB's corporate bond purchases on firms' credit risk, debt and investment, we focus on the CSPP. This programme, first announced in March 2016 and started by June 2016, aimed to ameliorate corporations' financial conditions and encourage NFCs to borrow and invest. Chapter 4 analyzes the CSPP's short-term and long-term effect on corporate credit risk by utilizing daily (from March to August 2016) and monthly data (June 2016- December 2018) of corporate zero-volatility, and nominal spreads. We also employ NFCs' debt covenants data to assess the pass-through of the CSPP to firms' risk of credit. We examine the CSPP's long-term effect on liquidity risk by using scaled bid-ask spread data. The data include purchased bonds under the CSPP (targeted bonds) and European bonds that were not purchased. We then analyze the CSPP's short-term and long-term impact on capital structure and capital allocation of NFCs whose bonds the ECB purchased (targeted firms) compare to European firms whose bonds were not purchased. Chapter 4 contributes to the literature by shedding light on the CSPP's short-term and long-term effect on corporate bonds' risk premia liquidity costs. Third, to the best of our knowledge, we are also the first to investigate the CSPP's long-term impact on firms' borrowing costs and corporate decisions. In Chapter 4 we find that following the CSPP announcement, targeted corporate bonds' zero-volatility spread, and nominal spread fell by 3.5 basis points (2.6%) and 4.1 basis points (4.2%), respectively. Initially, the programme encouraged firms to borrow more and pay dividends; however, it did not improve investments. Throughout its implementation (June 2016-December 2018), the CSPP only marginally reduced targeted bonds' risk premia and did not lower corporate bonds' liquidity risk. Nonetheless, it reduced targeted firms' cost of debt, improved their debt covenants, and encouraged investments. The findings in Chapter 4 suggest the CSPP did not have a persistent impact in reducing credit risk or liquidity risk in the corporate bond market; however, it had an economically significant lasting effect in lowering corporate debt cost and stimulating investment." -- TDX.

Download or read book Background Studies for the ECB s Evaluation of Its Monetary Policy Strategy written by Otmar Issing and published by . This book was released on 2003 with total page 344 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Regional Aspects of Monetary Policy in Europe written by Jürgen von Hagen and published by Springer Science & Business Media. This book was released on 2013-04-17 with total page 331 pages. Available in PDF, EPUB and Kindle. Book excerpt: Monetary union has dawned in Europe. Now that the common currency is a reality, questions concerning the practical conduct of monetary policy in the European Monetary Union (EMU) are moving to the forefront of the policy debate. Among these, one of the most critical is how the new monetary union will cope with the large heterogeneity of its member economies. Given the large differences in economic and financial structures among the EMU member states, monetary policy is likely to affect different member economies in different ways. Regional Aspects of Monetary Policy in Europe collects the proceedings of an international conference held at the Center for European Integration Studies of the University of Bonn, dedicated to this issue. The contributions to this conference fall into two parts. The first part consists of empirical and theoretical studies of the regional effects of monetary policy in heterogeneous monetary unions. The second part consists of papers analyzing the political economy of monetary policy in a monetary union of heterogeneous regions or member states. The papers all support the conclusion that regional differences in the responses to a common monetary policy will make European monetary policy especially difficult in the years to come. Such differences arise from a variety of sources, and they cannot be expected to be mere teething troubles that will disappear after a while. Even if they were ignored in the run-up to the EMU, Europe's central bankers and economic policy makers will have to learn how to cope with such differences in the future.

Download or read book Managing the Sovereign Bank Nexus written by Mr.Giovanni Dell'Ariccia and published by International Monetary Fund. This book was released on 2018-09-07 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews empirical and theoretical work on the links between banks and their governments (the bank-sovereign nexus). How significant is this nexus? What do we know about it? To what extent is it a source of concern? What is the role of policy intervention? The paper concludes with a review of recent policy proposals.

Download or read book Monetary Policy in Times of Crisis written by Massimo Rostagno and published by Oxford University Press. This book was released on 2021 with total page 449 pages. Available in PDF, EPUB and Kindle. Book excerpt: The first twenty years of the European Central Bank offer a unique insight into how a central bank can navigate macroeconomic insecurity and crisis. This volume examines the structures and decision-making processes behind the complex measures taken by the ECB to tackle some of the toughest economic challenges in the history of modern Europe.

Download or read book Negative Interest Rate Policy NIRP written by Andreas Jobst and published by International Monetary Fund. This book was released on 2016-08-10 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: More than two years ago the European Central Bank (ECB) adopted a negative interest rate policy (NIRP) to achieve its price stability objective. Negative interest rates have so far supported easier financial conditions and contributed to a modest expansion in credit, demonstrating that the zero lower bound is less binding than previously thought. However, interest rate cuts also weigh on bank profitability. Substantial rate cuts may at some point outweigh the benefits from higher asset values and stronger aggregate demand. Further monetary accommodation may need to rely more on credit easing and an expansion of the ECB’s balance sheet rather than substantial additional reductions in the policy rate.

Download or read book Powering the Digital Economy Opportunities and Risks of Artificial Intelligence in Finance written by El Bachir Boukherouaa and published by International Monetary Fund. This book was released on 2021-10-22 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper discusses the impact of the rapid adoption of artificial intelligence (AI) and machine learning (ML) in the financial sector. It highlights the benefits these technologies bring in terms of financial deepening and efficiency, while raising concerns about its potential in widening the digital divide between advanced and developing economies. The paper advances the discussion on the impact of this technology by distilling and categorizing the unique risks that it could pose to the integrity and stability of the financial system, policy challenges, and potential regulatory approaches. The evolving nature of this technology and its application in finance means that the full extent of its strengths and weaknesses is yet to be fully understood. Given the risk of unexpected pitfalls, countries will need to strengthen prudential oversight.