Questions tagged [central-banking]
In reference to activities undertaken by the central bank mainly to influence nominal interest rates, money supply and, eventually, price levels.
51 questions with no upvoted or accepted answers
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What kind of loans was Credit Suisse given by the Swiss central bank, recently?
Credit Suisse was recently extended \$54-cum-\$108 billion loans from the Swiss central bank, even as its takeover by UBS was announced (partly covered by taxpayers).
I'm slightly more familiar with ...
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Optimal monetary policy in IS-MR-PC model
I am trying to work out a formal solution for the central banks' problem in the slightly modified IS-MR-PC model (popularized by Carlin & Soskice (2015) and Carlin & Soskice (2023) textbooks).
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monetary policy reaction function with gmm: optimal lag for instruments
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I am estimating a Central Bank reaction function using GMM using monthly data.
Following the literature, I used lagged values of each variable as instruments (are there other feasible options?...
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Is there a clear timeline of ECB/Eurosystem's changes to the defintion of M3 (with regard to repos)?
I found that circa 2012 the ECB/Eurosystem changed their definition of M3 to exclude at least some repos, which previously were included. According to a 2014 Bundesbank publication, the change ...
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Did the robbers from Money Heist real steal noone's money?
Money Heist (original Spanish title: La Casa de papel) is a Spanish TV show about a bank heist.
From Wikipedia (bolding mine),
In Money Heist, a mysterious man, known as "The Professor", is ...
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How does reverse repo rate affect money supply?
What is the impact of increase/ decrease of reverse repo rate on Monetary Base, Money multiplier and therefore, overall money supply?
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Taylor rule and central bank preferences
When the central bank has output stability preferences, it is true that Taylor's rule (TR) is suboptimal compared to optimal monetary policy (MPR) if an inflationary shock occurs.
But when the central ...
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When the country's currency is falling, does it make sense for Central Bank to intervene beyond curbing Volatity?
Consider a country who have more imports than exports. If the country's currency is falling badly with reference to the dollar (and the dollar is the main trading currency for the said country), then ...
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Lender-of-last-resort institutional setup - are there trade offs?
In one of his papers, Minsky admonished the fragmented institutional set up that the US market has been using post-depression:
If the lender-of-Iast-resort function is decentralized so that
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Why has the Yen weakened despite lower inflation?
I have recently wondered about the depreciation of the Japanese Yen against the USD (or any other major currency).
Currently, a thousand Yen is at around USD 7,75. This is about about a twenty-year ...
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The influence of an increase in ATM's on the demand for central bank money
This is a question posed in Blanchard's book on Macroeconomics.
The question is simple. Consider an economy with a central bank (CB) and private banks. The demand for CB money is then determined by ...
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What is liquidity overhang?
I read in an economics article the following:
RBI Governor has decided to keep the unwinding of monetary policy gradual, calibrated, and non-disruptive while remaining supportive of the economic ...
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Does a rate hike by the Central Bank increase or decrease inflation?
Mainstream economic theory tells us that, in order to decrease inflation, the CB increases its rates so as to decrease loan creation which should decrease Aggregate Demand and thus lower inflation.
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Do (any) governments or central banks have an explicit or econometrically probable policy to "prop up" stock market prices?
This assumption (that governments [in the a broad sense of the term] prop up stock prices deliberately) has been taken as a given/assumption in another question here.
Is there evidence that they ...
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Why is there a big change in the money supply at the beginning of each month?
I was watching Argentina's daily change in monetary base for a selected period and there is a clear spike at the beginning on each month. Then during the month it slowly goes down until reaching ...
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Central Banks, Large Scale Asset Purchases and Inflation
First, the overview:
With the fractional reserve system, money/credit is primarily created through loans on deposits but the bank is required to maintain their deposits up to a certain amount (...
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Can the central bank interest rate policy still control inflation?
Historically, central banks have been using interest rate policy to control inflation.
In current times, most rates have been going ever lower, but it seems to be incapable of driving inflation up.
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Do you have a list of books about the evolution of the banking sector?
I'm looking for interesting books to read about the banking sector.
Topics:
Changes in the banking sector,
Adaptation of financial services in the digital age,
European and US banking regulations
...
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Are bailouts destabilizing the global economy?
I saw this posited in this WSJ opinion piece here
Notes on the Fed
In 1998, engineering a \$3.6 billion rescue of the giant hedge fund Long-Term Capital Management.
In 2001, slashing interest rates ...
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Have Bernanke, Geithner, Paulson, or the Fed ever responded to Laurence Ball's accusations about Lehman?
Ben Bernanke, Hank Paulson, and Timothy Geithner have repeatedly stated that they wanted to save Lehman Brothers but couldn't do so legally because Lehman didn't have enough collateral.
Laurence Ball ...
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Assessing the effectiveness of macroprudential liquidity requirements
I would like to investigate the effectiveness of Basel III Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) in containing systemic risk during crises. As far as I know, a few studies ...
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Did countries ever default against Federal Reserve's swap line?
Did foreign countries ever default against Fed's swap line or Foreign and International Monetary Authorities ? Or is it technically possible? I guess they will lose their collateral, and it's a big ...
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How is a central bank able to control currency supply in an economy which has other banks and non-physical currency?
As I understand, in most economies, the central bank is supposed to be in charge of monetary policy, which in part means that they are supposed to be the only authority which can increase the amount ...
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Survey of Consumer Finances - What counts as a family?
I am looking at the Federal Reserves survey of consumer finances. I am wondering what counts as a family? For example, would a single person living alone count as a family?
What about an adult son ...
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Reserve Bank of India monetary policy operating target
The operating target of RBI monetary policy is to keep weighted average call money market rate close to the policy repo rate. How does this target help RBI achieve its goal of price stability and ...
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should I weigh an average net margin calculation of Eurozone banks per number of banks or per asset size to validate parallel trends?
I'm trying to perform a DiD regression analysis in order to evaluate whether bank profitability has decreased with the implementation of a negative interest rate policy (NIRP). The regression is ...
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Is Bank for International Settlements still providing financial services to Afghanistan?
After the Taliban takeover of Afghanistan in August 2021, most of the major central banks such as the Fed, Bank of England, and Bundesbank froze FX reserves of the Afghan central bank (DAB). As of ...
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Where can I retrieve a complete history of macro economic data annoucements?
I'd like to get the complete ( well at least the last 20 years) history of economic data announcement calendar firstly for US and secondly for G5 countries.
I have found many websites that propose the ...
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China benchmark rates and Shibor relationship (chart)
I made the chart below for an assignment on People's Bank of China monetary policy during the financial crisis. The problem is that it got me very confused about the relationship between these ...
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The centralized shift from barter to currency economy
Suppose some ancient king of small bronze age city-state wants to introduce universal currency instead of barter that is currently in overwhelming practice in his kingdom. In order to smooth the shift,...
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How is seigniorage redistributed in the Eurozone?
An ECB page notes that:
As euro banknotes travel freely across borders, at any one time the number of banknotes in circulation registered at each national central bank can vary enormously. The ...
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What does it mean when a discount lender "rediscount[s] reserves"?
I was reading a wikipedia article about the evolution of global financial system: https://en.wikipedia.org/wiki/Global_financial_system#Interwar_period:_1915%E2%80%931944.
In the passage about the ...
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How does changing the Bank of England base rate work?
If we assume the demand for money (D above) is fixed in this position (for the purposes of this question), and supply (S) is fixed in this position, then how can the BoE change market interest rates (...
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Why does not the Bank of England set the Libor?
In a report by the BBC, it emerged that the Bank of England suggested some banks to lower the Libor, around 2008. The Libor is normally set by commercial banks, and it is directly affecting mortgages ...
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How is the banknote denomination designed?
Recently India demonetized their 500 and 1000 rupee notes. As a replacement a new 2000 rupee note was introduced. This has resulted in some chaos in the commercial markets due to decreased ...
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Positive examples of central bank interest rates adjustments policies
I'm looking for sources, maybe scientific articles, that study the effectiveness of central bank interest rate adjustments. Specifically, I'm looking for some kind of a proof by example, where a ...
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Is the ECB a lender of last resort for european governments?
One of the usual functions of a Central Bank is to be the last resort of commercial banks, and governments.
Does the ECB behave in this usual way toward European Governments? What about toward banks?...
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What would a 3 equation model with no central bank intervtion look like when there is a inflationary shock?
I been trying to figure it out this for college. The idea is that in a 3 equation model central bank intervention is needed via norimal intrest rate adjustments but don't they don't what would it look ...
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Why Central Banks didn't Use Raising Compulsory Deposit Rates More as Tool to Cool off The Economy instead of raising rates?
Community!
As sovereign debt raises worldwide even amid rising inflation, I wonder why I've never seem some action in the sense of raising compulsory deposit rates at the bank to shrink lending and ...
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Monetary policy: could there by alternative outcomes?
Firstly, I understand the standard analysis of how a central bank attempts to modulate credit conditions in the economy (and therefore money supply) to dampen demand to prevent excess price level ...
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Why don't central banks regulate inflation by stimulating supply, rather than arresting demand?
During an inflation spiral central banks will reduce the demand for goods by increasing the cost of money, thereby halting inflation but negatively impacting growth.
Rather than putting a brake on ...
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Modeling asymmetric effects
I was at a colloquium with the Bank of Canada and the presenter was showing some impulse response functions (IRFs) of rate change effects. Intuitively people tend to borrow more when rates decrease ...
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Difference between 'Internal Debt' and 'Market Loans' in RBI public debt statistics
While perusing RBI public debt statistics, I am at my wits end in trying to figure out the table headers.
I am unable to sum up any combination of them to get any other.
Specifically, what is the ...
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What would happend if the total quantity of money get fixed?
I was wondering what would happend if the total amount of money get fixed in an scenario were there is not exchange of good and services between countries markets. I think maybe the fact that prices ...
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Good books on money creation and monetary theory?
I just finished reading "Where does money come from?" (Ryan-Collins) on how commercial banks create the bulk of the money supply, and I am still hungry for more material that will help me ...
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Does monetary policy render mathematical models for short-rates nearly useless?
Note: please do note that I am a tech person with no economics background.
I've been studying short-rate models so much for interview purposes and finally took a step out of the weeds to think about ...
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How does the central bank reduce money supply by selling bonds if the buyer of the bonds can use bonds as currency?
When the central bank wants to reduce the money supply, it can sell bonds. That way, the money supply reduces by the amount paid for the bonds. The buyer will have bonds instead of cash. The bonds can ...
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Why did the Bank of England cut the base rate so low in 2009? And what didn't happen that made them keep it low until 2020?
I'm aware there was a financial crisis in 2008 and because of that crisis the BoE cut the base rate to very low. For example in 2008 the base rate was 5%, but by 2009 it was 0.5%.
But why did the BoE ...
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Why don't we mint more m0 instead of creating m1 through fractional reserve banking?
From what I understand, m1 money is just as liquid as m0 since an individual can withdraw it from the bank at any time and in any quantity (up to the amount (s)he deposited). Because of this I don't ...
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What is the list of countries where the central bank prints money?
Is there a list of the countries where the central bank is creating money, today ?
How much ? We know for:
EUR: Euro countries (since ECB QEs) (and euro-bound countries as DKK ?)
YEN: Japan (BOJ '...
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