Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152795
Authors: 
Bindseil, Ulrich
Camba-Méndez, Gonzalo
Hirsch, Astrid
Weller, Benedict
Year of Publication: 
2004
Series/Report no.: 
ECB Working Paper 361
Abstract: 
This paper explains to what extent excess reserves are and should be relevant today in the implementation of monetary policy, focusing on the speci?c case of the operational framework of the Eurosystem. In particular, this paper studies the impact that changes to the operational framework for monetary policy implementation have on the level and volatility of excess reserves. A ‘transaction costs’ model that replicates the rather speci?c intra-reserve maintenance period pattern of excess reserves in the euro area is developed. Simulation results presented not only show that excess reserves may increase considerably under some changes to the operational framework, but also that their volatility and hence unpredictability could.
Subjects: 
excess reserves
liquidity management
monetary policy implementation
JEL: 
E52
E58
Document Type: 
Working Paper

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