Central Bank Emergency Support To Securities Markets

Author : Darryl King,Mr.Luis Brandao-Marques,Kelly Eckhold,Peter Lindner,Diarmuid Murphy
Publisher : International Monetary Fund
Page : 50 pages
File Size : 49,8 Mb
Release : 2017-07-10
Category : Business & Economics
ISBN : 9781484308844

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Central Bank Emergency Support to Securities Markets by Darryl King,Mr.Luis Brandao-Marques,Kelly Eckhold,Peter Lindner,Diarmuid Murphy Pdf

This paper considers the central bank mandate with respect to financial stability and identifies the links to the functioning of securities markets. It argues that while emergency support to securities markets is an important part of the crisis management response, a high bar should be set for its use. Importantly, it should be used only as part of a comprehensive policy package. The paper considers what types of securities markets may be important for financial stability, what market conditions could trigger emergency support measures, and how programs can be designed to restore market functioning while minimizing moral hazard.

Author : Mr. Kelly Eckhold,Julia Faltermeier,Mr. Darryl King,Istvan Mak,Dmitri Petrov
Publisher : International Monetary Fund
Page : 77 pages
File Size : 50,6 Mb
Release : 2024-05-17
Category : Business & Economics
ISBN : 9798400275845

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EMDE Central Bank Interventions During COVID-19 to Support Market Functioning by Mr. Kelly Eckhold,Julia Faltermeier,Mr. Darryl King,Istvan Mak,Dmitri Petrov Pdf

This paper examines emerging market and developing economy (EMDE) central bank interventions to maintain financial stability during the COVID-19 pandemic. Through empirical analysis and case study reviews, it identifies lessons for designing future programs to address challenges faced in EMDEs, including less-developed financial markets and lower levels of institutional credibility. The focus is on the functioning of the financial markets that are key to maintaining financial stability—money, securities, and FX funding markets. Several lessons emerge, including: (i) objectives should be well-specified and communicated to facilitate eventual exit; (ii) intervention triggers should prioritize liquidity metrics over prices; (iii) actions should be sufficiently large to address market dysfunction; (iv) the risks of fiscal dominance and moral hazard should be minimized; and (v) program design should incentivize self-liquidation by appropriate pricing or through short-term operations that quickly liquidate. While interventions may increase risks to central bank balance sheets, potentially challenging policy solvency and operational independence, a well-designed framework can significantly mitigate these risks.

Author : Mr.Garry J. Schinasi
Publisher : International Monetary Fund
Page : 19 pages
File Size : 53,9 Mb
Release : 2003-06-01
Category : Business & Economics
ISBN : 9781451854404

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Responsibility of Central Banks for Stability in Financial Markets by Mr.Garry J. Schinasi Pdf

What is the role of central banks in ensuring financial stability? This paper addresses this controversial subject, in part by drawing on the experiences in Europe, Japan, and the United States, and by examining four questions. What is meant by financial stability? Do central banks have a natural role in ensuring financial stability? What does a central bank need to execute this role effectively? How far have central banks actually gone in safeguarding financial stability? The experience drawn on in the paper suggest that central banks: have a natural role to play; at times may require supervisory information to execute this natural role; and have incurred risks to their balance sheets to ensure financial stability.

Author : Mr.Marc Quintyn
Publisher : International Monetary Fund
Page : 66 pages
File Size : 43,9 Mb
Release : 1994-05
Category : Business & Economics
ISBN : UCSD:31822018773093

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Government Securities Versus Central Bank Securities in Developing Open Market Operations by Mr.Marc Quintyn Pdf

In an indirect monetary policy framework, open market operations become the central bank’s main instrument. In the initial stages, when financial markets are still undeveloped, selection of a financial instrument for those operations and the design of supporting arrangements to ensure the central bank’s operational autonomy when using the instrument, are crucial issues. Based on theoretical arguments and experience of a sample of countries that embarked on financial reforms, this paper argues that government securities are the preferred instrument because of their better capacity to develop financial markets. The use of government securities, however, requires the most complex supporting arrangements.

Author : Darryl King,Mr.Luis Brandao-Marques,Kelly Eckhold,Peter Lindner,Diarmuid Murphy
Publisher : International Monetary Fund
Page : 50 pages
File Size : 44,8 Mb
Release : 2017-07-10
Category : Business & Economics
ISBN : 9781484305850

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Central Bank Emergency Support to Securities Markets by Darryl King,Mr.Luis Brandao-Marques,Kelly Eckhold,Peter Lindner,Diarmuid Murphy Pdf

This paper considers the central bank mandate with respect to financial stability and identifies the links to the functioning of securities markets. It argues that while emergency support to securities markets is an important part of the crisis management response, a high bar should be set for its use. Importantly, it should be used only as part of a comprehensive policy package. The paper considers what types of securities markets may be important for financial stability, what market conditions could trigger emergency support measures, and how programs can be designed to restore market functioning while minimizing moral hazard.

Author : Board of Governors of the Federal Reserve System
Publisher : Unknown
Page : 0 pages
File Size : 48,6 Mb
Release : 2002
Category : Banks and Banking
ISBN : 0894991965

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The Federal Reserve System Purposes and Functions by Board of Governors of the Federal Reserve System Pdf

Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.

Author : Marc Dobler,Mr.Simon Gray,Diarmuid Murphy,Bozena Radzewicz-Bak
Publisher : International Monetary Fund
Page : 63 pages
File Size : 53,7 Mb
Release : 2016-01-22
Category : Business & Economics
ISBN : 9781513567785

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The Lender of Last Resort Function after the Global Financial Crisis by Marc Dobler,Mr.Simon Gray,Diarmuid Murphy,Bozena Radzewicz-Bak Pdf

The global financial crisis (GFC) has renewed interest in emergency liquidity support (sometimes referred to as “Lender of Last Resort”) provided by central banks to financial institutions and challenged the traditional way of conducting these operations. Despite a vast literature on the topic, central bank approaches and practices vary considerably. In this paper we focus on, for the most part, the provision of idiosyncratic support, approaching it from an operational perspective; highlighting different approaches adopted by central banks; and also identifying some of the issues that arose during the GFC.

Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 85 pages
File Size : 50,8 Mb
Release : 2019-06-24
Category : Business & Economics
ISBN : 9781498321112

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Canada by International Monetary Fund. Monetary and Capital Markets Department Pdf

This Financial System Stability Assessment paper discusses that Canada has enjoyed favorable macroeconomic outcomes over the past decades, and its vibrant financial system continues to grow robustly. However, macrofinancial vulnerabilities—notably, elevated household debt and housing market imbalances—remain substantial, posing financial stability concerns. Various parts of the financial system are directly exposed to the housing market and/or linked through housing finance. The financial system would be able to manage severe macrofinancial shocks. Major deposit-taking institutions would remain resilient, but mortgage insurers would need additional capital in a severe adverse scenario. Housing finance is broadly resilient, notwithstanding some weaknesses in the small non-prime mortgage lending segment. Although banks’ overall capital buffers are adequate, additional required capital for mortgage exposures, along with measures to increase risk-based differentiation in mortgage pricing, would be desirable. This would help ensure adequate through-the cycle buffers, improve mortgage risk-pricing, and limit procyclical effects induced by housing market corrections.

Author : Mr.Giovanni Dell'Ariccia,Caio Ferreira,Nigel Jenkinson,Mr.Luc Laeven,Alberto Martin,Ms.Camelia Minoiu,Alex Popov
Publisher : International Monetary Fund
Page : 54 pages
File Size : 53,9 Mb
Release : 2018-09-07
Category : Business & Economics
ISBN : 9781484359624

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Managing the Sovereign-Bank Nexus by Mr.Giovanni Dell'Ariccia,Caio Ferreira,Nigel Jenkinson,Mr.Luc Laeven,Alberto Martin,Ms.Camelia Minoiu,Alex Popov Pdf

This paper reviews empirical and theoretical work on the links between banks and their governments (the bank-sovereign nexus). How significant is this nexus? What do we know about it? To what extent is it a source of concern? What is the role of policy intervention? The paper concludes with a review of recent policy proposals.

Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 44 pages
File Size : 48,8 Mb
Release : 2018-07-19
Category : Business & Economics
ISBN : 9781484369487

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Euro Area Policies by International Monetary Fund. Monetary and Capital Markets Department Pdf

The flexibility shown by the ECB/Eurosystem in adapting its framework, as required by circumstances, has helped improve funding and liquidity conditions. Compared to the situation pre-crisis, the ECB/Eurosystem has provided liquidity against a broader range of collateral and for as long as four years in terms of maturity; extended liquidity in foreign currency; conducted outright purchases of public and private sector assets (now tapering off); and reduced interest rates into negative territory. In these arrangements, policy is directed from the center, but is implemented mostly by the National Central Banks (NCBs); risks are largely shared. Market participants are complimentary about the role the ECB/Eurosystem has played in backstopping the financial system and its forward guidance on monetary policy.

Author : Mr.Luis Ignacio Jácome,Ms.Marcela Matamoros-Indorf,Ms.Mrinalini Sharma,Mr.Simon Townsend
Publisher : International Monetary Fund
Page : 44 pages
File Size : 51,7 Mb
Release : 2012-01-01
Category : Business & Economics
ISBN : 9781463957391

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Central Bank Credit to the Government by Mr.Luis Ignacio Jácome,Ms.Marcela Matamoros-Indorf,Ms.Mrinalini Sharma,Mr.Simon Townsend Pdf

Using a central bank legislation database, this paper documents and analyzes worldwide institutional arrangements for central bank lending to the government and identifies international practices. Key findings are: (i) in most advanced countries, central banks do not finance government expenditure; (ii) in a large number of emerging and developing countries, short-term financing is allowed in order to smooth out tax revenue fluctuations; (iii) in most countries, the terms and conditions of these loans are typically established by law, such that the amount is capped at a small proportion of annual government revenues, loans are priced at market interest rates, and their maturity falls within the same fiscal year; and (iv) in the vast majority of countries, financing other areas of the state, such as provincial governments and public enterprises, is not allowed. The paper does not address central banks' financial support during financial crises.

Author : Anonim
Publisher : Unknown
Page : 189 pages
File Size : 44,9 Mb
Release : 2009
Category : Banks and banking, Central
ISBN : 9291317918

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Issues in the Governance of Central Banks by Anonim Pdf

This report by the Central Bank Governance Group presents information intended to help decision-makers set up governance arrangements that are most suitable for their own circumstances. The report draws on a large body of information on the design and operation of central banks that the BIS has brought together since it initiated work on central bank governance in the early 1990s. The need to deal with chronic inflation in the 1970s and 1980s prompted the identification of price stability as a formal central bank objective and led to a significant reworking of governance arrangements. The current global financial crisis could have equally important implications for central banks, particularly with respect to their role in fostering financial stability. Although it is too early to know how central banking will change as a result, the report takes an important first step in identifying governance questions that the crisis poses.

Author : International Monetary Fund. Fiscal Affairs Dept.,International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 64 pages
File Size : 47,7 Mb
Release : 2013-10-06
Category : Business & Economics
ISBN : 9781498341714

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Key Aspects of Macroprudential Policy - Background Paper by International Monetary Fund. Fiscal Affairs Dept.,International Monetary Fund. Monetary and Capital Markets Department Pdf

The countercyclical capital buffer (CCB) was proposed by the Basel committee to increase the resilience of the banking sector to negative shocks. The interactions between banking sector losses and the real economy highlight the importance of building a capital buffer in periods when systemic risks are rising. Basel III introduces a framework for a time-varying capital buffer on top of the minimum capital requirement and another time-invariant buffer (the conservation buffer). The CCB aims to make banks more resilient against imbalances in credit markets and thereby enhance medium-term prospects of the economy—in good times when system-wide risks are growing, the regulators could impose the CCB which would help the banks to withstand losses in bad times.

Author : Abdourahmane Sarr,Tonny Lybek
Publisher : International Monetary Fund
Page : 72 pages
File Size : 53,8 Mb
Release : 2002-12
Category : Business & Economics
ISBN : UCSD:31822032179178

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Measuring Liquidity in Financial Markets by Abdourahmane Sarr,Tonny Lybek Pdf

This paper provides an overview of indicators that can be used to illustrate and analyze liquidity developments in financial markets. The measures include bid-ask spreads, turnover ratios, and price impact measures. They gauge different aspects of market liquidity, namely tightness (costs), immediacy, depth, breadth, and resiliency. These measures are applied in selected foreign exchange, money, and capital markets to illustrate their operational usefulness. A number of measures must be considered because there is no single theoretically correct and universally accepted measure to determine a market's degree of liquidity and because market-specific factors and peculiarities must be considered.

Author : Group of Ten. Committee on Payment and Settlement Systems
Publisher : Unknown
Page : 80 pages
File Size : 53,7 Mb
Release : 2004
Category : Clearing of securities
ISBN : IND:30000116787171

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Recommendations for Central Counterparties by Group of Ten. Committee on Payment and Settlement Systems Pdf