Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/22860
Authors: 
Nautz, Dieter
Oechssler, Jörg
Year of Publication: 
2003
Series/Report no.: 
Bonn Econ Discussion Papers 10/2003
Abstract: 
This paper investigates various theories explaining banks' overbidding in the fixed rate tenders of the European Central Bank (ECB). Using auction data from both the Bundesbank and the ECB, we show that none of the theories can on its own explain the observed overbidding. This implies that the proposed new rules by the ECB, aimed at neutralizing interest rate expectations, would not eliminate overbidding if the rationing rule in the fixed rate tenders remains unchanged.
Subjects: 
Overbidding
repo auctions
monetary policy instruments of the European Central Bank
JEL: 
E52
D44
Document Type: 
Working Paper

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