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The Zero Lower Bound and Financial Stability: A New Role for Central Banks?

Gespeichert in:

Personen und Körperschaften: Schulze, Tatjana (VerfasserIn), Tsomocos, Dimitrios P. (Sonstige)
Weitere Verfasser: Tsomocos, Dimitrios P. [Sonstige]
Format: E-Book
Sprache: Englisch
veröffentlicht:
[S.l.] SSRN [2020]
Quelle: Verbunddaten SWB
Lizenzfreie Online-Ressourcen
Details
Zusammenfassung: Are critics' concerns for bank profitability a justification for the European Central Bank to raise interest rates from the (zero) lower bound (ZLB)? Using a general equilibrium model with banks and collateral default, we analyze optimal monetary and regulatory policy upon departure from the ZLB. Rather than supporting bank profits, higher interest rates depress inflation when higher debt servicing costs increase losses from default. Precisely these losses offset any gains from banks' interest margin. Monetary policy operates beyond traditional channels, stressing the relevance of Fisherian debt-deflation forces. They warrant incorporating financial stability objectives into central banks' objective function
Beschreibung: Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments June 15, 2020 erstellt
Umfang: 1 Online-Ressource (42 p)
DOI: 10.2139/ssrn.3627088
Zugang: Open Access