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Title:The effectiveness of monetary policy during the recent financial turmoil PDF Logo
Authors:Abbassi, Puriya
Linzert, Tobias
Issue Date:2010
Series/Report no.:Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Monetary Policy Rules and Institutions B16-V1
Abstract:The recent financial crisis has deeply affected money markets. We analyze the effectiveness of monetary policy in the euro area with respect to (i) how much monetary policy expectations are reflected in money market rates, (ii) how much money market rates were disturbed by liquidity and credit risk, and (iii) the impact of extraordinary central bank measures on money markets. We find that market's expectations are less relevant for money market rates up to 12 months after August 2007. At the same time, the ECB's additional liquidity provision through longer-term refinancing operations account for at least a 60 basis point decrease in Euribor rates.
Subjects:Monetary transmission mechanism
Financial Crisis
Monetary policy implementation
European Central Bank
Money market
JEL:E43
E52
E58
Document Type:Conference Paper
Appears in Collections:Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie

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