Financial Plumbing and Monetary Policy /

This paper focuses on how changes in financial plumbing of the markets may impact the monetary policy options as central banks contemplate lift off from zero lower bound (ZLB). Under the proposed regulations, banks will face leverage ratio constraints. As a result of quantitative easing (QE), banks...

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Bibliographic Details
Main Author: Singh, Manmohan
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2014.
Series:IMF Working Papers; Working Paper ; No. 2014/111
Online Access:Full text available on IMF
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520 3 |a This paper focuses on how changes in financial plumbing of the markets may impact the monetary policy options as central banks contemplate lift off from zero lower bound (ZLB). Under the proposed regulations, banks will face leverage ratio constraints. As a result of quantitative easing (QE), banks want balance sheet 'space' for financial intermediation/ non-depository activities. At the same time, regulatory changes are boosting demand for high quality liquid assets. The paper also discusses the role of repo markets and the importance of collateral velocity and the need to avoid wedges between repo and monetary policy rates when leaving ZLB. 
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830 0 |a IMF Working Papers; Working Paper ;  |v No. 2014/111 
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