The Implications of Liquidity Regulation for Monetary Policy Implementation and the Central Bank Balance Sheet Size: An Empirical Analysis of the Euro Area

Kedan, Danielle; Veghazy, Alexia Ventula

doi:10.2139/ssrn.3797135

Cited by 7 publications

(7 citation statements)

References 18 publications

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“…These views are in line with a long‐standing ECB tradition where, ever since its inception, monetary policy decisions are explained in detail in a press conference on the same day as they are announced, and the Governing Council's views regarding the economic outlook are outlined (Issing 1999). In addition, the ECB has published staff macroeconomic projections since December 2000, which were expanded to include additional information, for example, with regard to employment, in June 2013 (Kedan and Stuart 2014). The literature on information effects (Jarocínski and Karadi 2020) has highlighted that these form an important component of the ECB's communication.…”

Section: Summary Of Resultsmentioning

confidence: 99%

Monetary Policy Communication: Perspectives from Former Policymakers at the ECB

Ehrmann¹,

Holton²,

Kedan³

et al. 2023

J of Money Credit Banking

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A survey on monetary policy communication among former members of the Governing Council of the European Central Bank (ECB) reveals that enhancing credibility and trust is viewed as the most important objective of communication. Respondents judge communication with financial markets and experts as adequate, but see room for improvement in communicating with the public. The central bank objective is seen as the most important topic. Several respondents perceived the ECB's inflation aim of “below, but close to, 2%” that was in place at the time as ambiguous and in need of clarification. Overall, there is broad consensus on various communication issues.

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Section: Summary Of Resultsmentioning

confidence: 99%

Monetary Policy Communication: Perspectives from Former Policymakers at the ECB

Ehrmann¹,

Holton²,

Kedan³

et al. 2023

J of Money Credit Banking

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show abstract

“…Second, we do not impose a strict pecking order of the operations since it is more likely that banks operate by selecting their strategies according to i) the effective costs of liquidity, depending on the market discounts for sales, or depending on the interest rate and the applied haircut for the inter-bank and Central Bank credit operations 16 ; ii) their needs and objectives, as the strategy changes if banks need to cover depositors' withdrawals or balance their asset portfolio to restyle their regulatory ratios (Kedan and Veghazy, 2021;Jasova et al, 2021).…”

Section: Banks' Strategiesmentioning

confidence: 99%

Stress Testing with Multi-Faceted Liquidity: The Central Bank Collateral Framework as a Financial Stability Tool

Cuzzola,

Barbieri,

Bindseil

2023

SSRN Journal

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“…This is so because the marginal costs of deviations between 𝑥 and 𝐴 get high very fast, if such costs are quadratic, while the marginal costs of deviations between 𝑦 and 𝐵 are low as long as the deviation is small. 23 In the next section, we will provide empirical evidence indicating that there was no casual impact from LCR levels on technical LCR boosts in 2020. This suggests that at least for the euro area in 2020, our linear cost function might be more realistic than a quadratic one.…”

Section: Theoretical Analysismentioning

confidence: 99%