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http://hdl.handle.net/10419/37356
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| Title: | | The Euro Area Interbank Market and the Liquidity Management of the Eurosystem in the Financial Crisis  |
| Authors: | | Hauck, Achim Neyer, Ulrike |
| Issue Date: | | 2010 |
| Series/Report no.: | | Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Banking and Monetary Policy D12-V2 |
| Abstract: | | This paper develops a theoretical model which explains several stylized facts observed in the euro area interbank market after the collapse of Lehman Brothers in 2008. The model shows that if transaction costs are high, banks with a liquidity deficit will prefer to borrow liquidity from the central bank rather than from surplus banks in the interbank market. This implies that the central bank assumes an intermediary function. From a policy perspective, we argue that possible measures of the Eurosystem to reactivate the interbank market may conflict, inter alia, with monetary policy aims. |
| Subjects: | | Liquidity Monetary Policy Instruments Interbank Market Financial Crisis |
| JEL: | | E52 E58 G21 |
| Document Type: | | Conference Paper |
| Appears in Collections: | | Jahrestagung des Vereins für Socialpolitik 2010 (Kiel): Ökonomie der Familie
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