Download or read book The Impact of Central Bank Announcements on Asset Prices in Real Time written by Carlo Rosa and published by . This book was released on 2006 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the effect of European Central Bank communication on the price discovery process in the Euribor futures market using a new tick-by-tick dataset. First, we show that two pieces of news systematically hit financial markets on Governing Council meeting days: the ECB policy rate decision and the explanation of its monetary policy stance. Second, we find that the unexpected component of ECB explanations has a significant and sizeable impact on futures prices. This indicates that the ECB has already acquired some credibility: financial markets seem to believe that it does what it says it will do. Finally, our results suggest that the Euribor futures market is semi-strong form informational efficient.
Download or read book The Impact of Central Bank Announcements on Asset Prices in Real Time written by Carlo Rosa and published by . This book was released on 2008 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Asset Prices and Monetary Policy written by John Y. Campbell and published by University of Chicago Press. This book was released on 2008-11-15 with total page 444 pages. Available in PDF, EPUB and Kindle. Book excerpt: Economic growth, low inflation, and financial stability are among the most important goals of policy makers, and central banks such as the Federal Reserve are key institutions for achieving these goals. In Asset Prices and Monetary Policy, leading scholars and practitioners probe the interaction of central banks, asset markets, and the general economy to forge a new understanding of the challenges facing policy makers as they manage an increasingly complex economic system. The contributors examine how central bankers determine their policy prescriptions with reference to the fluctuating housing market, the balance of debt and credit, changing beliefs of investors, the level of commodity prices, and other factors. At a time when the public has never been more involved in stocks, retirement funds, and real estate investment, this insightful book will be useful to all those concerned with the current state of the economy.
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 Time Variation in Asset Price Responses to Macro Announcements written by Linda S. Goldberg and published by . This book was released on 2013 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: Although the effects of economic news announcements on asset prices are well established, these relationships are unlikely to be stable. This paper documents the time variation in the responses of yield curves and exchange rates using high frequency data from January 2000 through August 2011. Significant time variation in news effects is present for those announcements that have the largest effects on asset prices. The time variation in effects is explained by economic conditions, including the level of policy rates at the time of the release, and risk conditions: government bond yields increase in response to "good news", but less so when risk is elevated. Risk conditions matter since they can capture the effects of uncertainty on the information content of news announcements, the interaction of monetary policy and financial stability objectives of central banks, and the effect of news announcements on the risk premium.
Download or read book Asset Prices and Central Bank Policy written by Stephen Giovanni Cecchetti and published by Centre for Economic Policy Research. This book was released on 2000 with total page 164 pages. Available in PDF, EPUB and Kindle. Book excerpt: Concludes the role of asset prices in monetary policy is one of the most important, and difficult, questions confronting central banks.
Download or read book Central Banking Monetary Policies and the Implications for Transition Economies written by Mario I. Blejer and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 458 pages. Available in PDF, EPUB and Kindle. Book excerpt: the adaptation of the institutional settings of monetary policy to deal with an emerging market economy had to be carried out in the midst of an unprecedented stabilization effort and, therefore, was particularly urgent and complicated. In many of the transition countries, the transformation effort implied not just changes in procedures but the establishment of a central bank from scratch, a process that involved an important effort, precisely at a time when the whole system was in serious turmoil. While the process of reforms is not yet completed in all the transition countries, an immense amount of progress has been achieved, and many of the transition countries face today monetary and central banking conditions that are close to those of Western economies. In this volume, we collect a number of important contributions that discuss the most burning aspects of the current debates on central banking and monetary policy and draw implications for the postsocialist transition economies. The various papers included in the volume deal with a broad set of related issues, which are highly relevant not just for transition economies but for other emerging markets and for advanced economies as well. The subjects covered in the book are divided into seven major categories (Sections II to VIII), some of which overlap.
Download or read book Wall Street Revalued written by Andrew Smithers and published by John Wiley & Sons. This book was released on 2009-08-24 with total page 293 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 2000 one of the world’s foremost economists, Andrew Smithers, showed that the US stock market was widely over-priced at its peak and correctly advised investors to sell. He also argued that central bankers should adjust their policies not only in light of expected inflation but also if stock prices reach excessive levels. At the time, few economists agreed with him, today it is hard to find those who would disagree. In the past central bankers have denied that markets can be valued and that it did not matter if they fell. These two intellectual mistakes are the fundamentals cause of the current financial market crisis. In addition, a lack of understanding by investors as to how to value the market has also resulted in widespread losses. It is clearly of great importance to everyone that neither these losses nor the current financial chaos should be repeated and thus that the principle of asset valuation should be widely understood. In this timely and thought-provoking sequel to the hugely successful Valuing Wall Street Andrew Smithers puts forward a coherent and testable economic theory in order to influence investors, pension consultants and central bankers policy decisions so that thy may prevent history repeating itself. Backed by theory and substantial evidence Andrew shows that assets can be valued, as financial markets are neither perfectly efficient nor absurd casinos.
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 Do Central Banks Need Capital written by Mr.Peter Stella and published by International Monetary Fund. This book was released on 1997-07-01 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Central banks may operate perfectly well without capital as conventionally defined. A large negative net worth, however, is likely to compromise central bank independence and interfere with its ability to attain policy objectives. If society values an independent central bank capable of effectively implementing monetary policy, recapitalization may become essential. Proper accounting practice in determining central bank profit or loss and rules governing the transfer of the central bank’s operating result to the treasury are also important. A variety of country-specific central bank practices are reviewed to support the argument.
Download or read book Household Decisions Credit Markets and the Macroeconomy written by John Muellbauer and published by . This book was released on 2010 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: It is widely acknowledged that the recent generation of DSGE models failed to incorporate many of the liquidity and financial accelerator mechanisms revealed in the global financial crisis that began in 2007. This paper complements the papers presented at the 2009 BIS annual conference focused on the role of banks and other financial institutions by analysing the role of household decisions and their interplay with credit conditions and asset prices in the light of empirical evidence. In DSGE models without financial frictions, asset prices are merely a proxy for income growth expectations and play no separate role. On UK aggregate consumption evidence, section 2 of the paper shows this is strongly contradicted by the data, for all possible discount rates and both for a perfect foresight and an empirical rational expectations approach to measuring income expectations. However, an Ando-Modigliani consumption function generalised to include a role for liquidity, uncertainty, time varying credit conditions, wealth and housing collateral effects, as well as income expectations, explains the data well. Section 3 reports new evidence on the striking rejection on aggregate data of the consumption Euler equation central to all DSGE models. Section 4 shows that UK micro evidence is consistent with the generalised Ando-Modigliani model. Section 5 discusses the limitations of recent DSGE models with financial frictions and housing. Section 6 discusses some business cycle implications of amplification mechanisms and non-linearities operating via households and residential construction. It reconsiders econometric methodology appropriate for designing better evidence-based central bank policy models.
Download or read book Staff Guidance Note on Macroprudential Policy written by International Monetary Fund and published by International Monetary Fund. This book was released on 2014-06-11 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: This note provides guidance to facilitate the staff’s advice on macroprudential policy in Fund surveillance. It elaborates on the principles set out in the “Key Aspects of Macroprudential Policy,” taking into account the work of international standard setters as well as the evolving country experience with macroprudential policy. The main note is accompanied by supplements offering Detailed Guidance on Instruments and Considerations for Low Income Countries
Download or read book How Do Central Banks Talk written by Alan S. Blinder and published by Centre for Economic Policy Research. This book was released on 2001 with total page 150 pages. Available in PDF, EPUB and Kindle. Book excerpt: Not long ago, secrecy was the byword in central banking circles, but now the unmistakable trend is towards greater openness and transparency. This, the third Geneva Report on the World Economy, describes and evaluates some of the changes in how central banks talk to the markets, to the press, and to the public. The report first assesses the case for transparency ? defined as providing sufficient information for the public to understand the policy regime ? and concludes that it is very strong, based on both policy effectiveness and democratic accountability. It then examines what should be the content of communication and argues that central banks ought to spell out their long-run objectives and methods. It then investigates the link between the decision-making process and central bank communication, drawing a distinction between individualistic and collegial committees. The report concludes with a review of the communications strategies of some of the main central banks.
Download or read book The Financial Market Effect of FOMC Minutes written by Carlo Rosa and published by . This book was released on 2014 with total page 15 pages. Available in PDF, EPUB and Kindle. Book excerpt: The influence of the Federal Reserve's unanticipated target rate decisions on U.S. asset prices has been the subject of numerous studies. More recently, researchers have looked at the asset price response to statements issued by the Federal Open Market Committee (FOMC). Yet, despite a vast and growing body of evidence on the financial market effect of monetary news released on FOMC meeting days, little is known about the real-time response of U.S. asset prices to the information contained in central bank minutes. This article fills the gap by using a novel, high-frequency data set to examine the effect of the FOMC minutes release on U.S. asset prices -- Treasury rates, stock prices, and U.S. dollar exchange rates. The author shows that the release significantly affects the volatility of U.S. asset prices and their trading volume. The magnitude of the effects is economically and statistically significant, and it is similar in magnitude to the Institute for Supply Management manufacturing index release, although smaller than that of the FOMC statement and nonfarm payrolls releases. The asset price response to the minutes, however, has declined in recent years, suggesting that the FOMC has become more transparent by releasing information in a timelier manner.
Download or read book Financial Stability Reports written by Ms.Sònia Muñoz and published by International Monetary Fund. This book was released on 2012-01-01 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: The global financial crisis has renewed policymakers' interest in improving the policy framework for financial stability, and an open question is to what extent and in what form should financial stability reports be part of it. We examine the recent experience with central banks' financial stability reports, and find?despite some progress in recent years?that forward-looking perspective and analysis of financial interconnectedness are often lacking. We also find that higher-quality reports tend to be associated with more stable financial environments. However, there is only a weak empirical link between financial stability report publication per se and financial stability. This suggests room for improvement in terms of the quality of financial stability reports.
Download or read book Central Bank Finances written by David Archer and published by . This book was released on 2013 with total page 90 pages. Available in PDF, EPUB and Kindle. Book excerpt:
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.
