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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: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2014
Series:IMF Working Papers
Subjects:
Interest Rates
Public Administration
International Monetary Arrangements And Institutions
Banks
Finance
Banks And Banking
Industries: Financial Services
Financial Statements
Financial Services
Mortgages
Collateral
International Financial Markets
Accounting
Public Sector Accounting And Audits
Public Financial Management (pfm)
Banking
Financial Reporting, Financial Statements
Depository Institutions
Institutional Investors
Corporation And Securities Law
Pension Funds
Financial Institutions
Hedge Funds
General Financial Markets: Government Policy And Regulation
Financial Instruments
Micro Finance Institutions
Financial Institutions And Services: Government Policy And Regulation
Non-bank Financial Institutions
Repo Rates
Loans
Finance, Public; Accounting
Financial Services Industry
Interest Rates: Determination, Term Structure, And Effects
Central Bank Policy Rate
United States
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary: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.
Physical Description:18 pages
ISBN:9781498367134

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