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Do conventional monetary policy instruments matter in unconventional times?

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Bibliographic Details
Authors and Corporations: Buchholz, Manuel (Author), Schmidt, Kirsten (Author), Tonzer, Lena (Author)
Other Authors: Schmidt, Kirsten 1990- [Author] • Tonzer, Lena [Author]
Type of Resource: E-Book
Language: English
Frankfurt am Main Deutsche Bundesbank [2019]
Series: Deutsche Bundesbank: Discussion paper ; no 2019, 27
Source: Verbunddaten SWB
Lizenzfreie Online-Ressourcen
ISBN: 9783957296085
Summary: This paper investigates how declines in the deposit facility rate set by the ECB affect euro area banks' incentives to hold reserves at the central bank. We find that, in the face of lower deposit rates, banks with a more interest-sensitive business model are more likely to reduce reserve holdings and allocate freed-up liquidity to loans. The result is driven by wellcapitalized banks in the non-GIIPS countries of the euro area. This reveals that conventional monetary policy instruments have limited effects in restoring monetary policy transmission during times of crisis.
Physical Description: 1 Online-Ressource (circa 62 Seiten); Illustrationen
ISBN: 9783957296085