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Author: Mr.Manmohan Singh
Publisher: International Monetary Fund
ISBN: 1498330614
Category : Business & Economics
Languages : en
Pages : 18
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Book Description
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.
Author: Mr.Manmohan Singh
Publisher: International Monetary Fund
ISBN: 1498330614
Category : Business & Economics
Languages : en
Pages : 18
Get Book Here
Book Description
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.
Author: Manmohan Singh
Publisher:
ISBN:
Category : Credit
Languages : en
Pages : 211
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Book Description
Collateral is one of the building blocks on which the financial markets are constructed. Used for a number of purposes--including trading with central counterparties (CCPs), secured funding with market counterparties and central banks, OTC derivatives margining and settlement--the role of effective collateral management in monetizing assets has never been more important.
Author: Mr.Manmohan Singh
Publisher: International Monetary Fund
ISBN: 1498367135
Category : Business & Economics
Languages : en
Pages : 18
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Book Description
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.
Author: Karel Lannoo
Publisher: Rowman & Littlefield
ISBN: 1783484292
Category : Business & Economics
Languages : en
Pages : 201
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Book Description
The financial crisis has led to a far-reaching redesign of the European regulatory and supervisory framework. Following the commitments made in the context of the G-20, but also reacting to internal shortcomings, the EU engaged in a massive program to re-regulate financial markets. The EU furthermore redesigned the structure for supervisory cooperation, initially through the European Supervisory Authorities, and later in its ambition to form the Banking Union. In The Great Financial Plumbing, Karel Lannoo systematically assesses the new regulatory and supervisory framework. The book’s structure follows the big questions on the agenda: 1) What is Banking Union? 2) How have the concerns of the G-20 been addressed by the EU (oversight of credit-rating agencies, better capital for banks, the re-regulation of securities and derivatives markets, asset management, depositor protection and bank resolution)? 3) How were uniquely EU rules on state aid applied to the banking sector? This book is designed to give professionals, policy-makers and students a better understanding of the new regulatory framework and insights into the policy context that has led to the new rules governing financial markets in Europe.
Author: Perry Mehrling
Publisher: Princeton University Press
ISBN: 1400836263
Category : Business & Economics
Languages : en
Pages : 189
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Book Description
How the U.S. Federal Reserve began actively intervening in markets Walter Bagehot's Lombard Street, published in 1873 in the wake of a devastating London bank collapse, explained in clear and straightforward terms why central banks must serve as the lender of last resort to ensure liquidity in a faltering credit system. Bagehot's book set down the principles that helped define the role of modern central banks, particularly in times of crisis—but the recent global financial meltdown has posed unforeseen challenges. The New Lombard Street lays out the innovative principles needed to address the instability of today's markets and to rebuild our financial system. Revealing how we arrived at the current crisis, Perry Mehrling traces the evolution of ideas and institutions in the American banking system since the establishment of the Federal Reserve in 1913. He explains how the Fed took classic central banking wisdom from Britain and Europe and adapted it to America's unique and considerably more volatile financial conditions. Mehrling demonstrates how the Fed increasingly found itself serving as the dealer of last resort to ensure the liquidity of securities markets—most dramatically amid the recent financial crisis. Now, as fallout from the crisis forces the Fed to adapt in unprecedented ways, new principles are needed to guide it. In The New Lombard Street, Mehrling persuasively argues for a return to the classic central bankers' "money view," which looks to the money market to assess risk and restore faith in our financial system.
Author: W. Raphael Lam
Publisher: International Monetary Fund
ISBN: 1513539949
Category : Business & Economics
Languages : en
Pages : 392
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Book Description
China is at a critical juncture in its economic transformation as it tries to rebalance what is generally seen as an exhausted growth model. A unifying theme across the reforms that will deliver this transformation is that it can no longer be achieved by raising the amount of physical investment and government direction of resource allocation. Instead China is building a new set of policy frameworks that will allow markets to function more effectively—not unfettered markets, but markets that work efficiently, in line with broad social and other policy goals, and in a sustainable way. Hence, China is now building a new soft infrastructure, that is, the institutional plumbing that underpins and guides the functioning of markets as the key organizing principle toward achieving sustained economic and social progress. Against this background, this volume provides policymakers, academics, and the public with valuable information about policies and institutions in China today. It also looks at the road ahead and key principles that can help China in navigating it. The book focuses on issues crucial in the country’s transformation, such as tax policy and administration, social security, state-owned enterprise reform, medium-term expenditure frameworks, the role of local government finances, capital account liberalization, and renminbi internationalization. As China moves toward a more price-based allocation of resources, strengthening monetary policy frameworks and financial sector regulation will be particularly important in channeling resources to the most productive sectors and minimizing the risks of financial sector stress. Also, upgrading statistical frameworks will be critical for macroeconomic policymaking and investors. Visit : http://www.elibrary.imf.org/page/modernizing-china
Author: Joseph Wang
Publisher: Joseph Wang
ISBN: 0999136755
Category : Business & Economics
Languages : en
Pages : 196
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Book Description
Central banking is magic. With a few words, the Fed can lift the stock market out of desperation and catapult it towards euphoric highs. With a few keystrokes, the Fed can conjure up trillions of dollars and fund virtually unlimited Federal spending. And with a few poor decisions, the Fed can plunge the entire world into a recession. The Federal Reserve is one of the most powerful institutions in the world, and also one of the most difficult to understand. The Fed acts through its Open Markets Desk, which sits at the heart of the global financial system as the world’s ultimate and limitless provider of dollars. On behalf of policy makers, the Desk gathers market intelligence from all the major market participants, sifts through reams of internal data, and works behind the scenes keep the financial system intact. It is responsible for all of the Fed's market operations, from trillions in quantitative easing to hundreds of billions in repo and FX-swap loans. The financial crises of 2008 and 2020 abated only through the emergency interventions of the Desk. Joseph Wang spent five years studying the monetary system as a trader on the Desk. From that vantage point, Joseph saw firsthand how the Fed operates and how the financial system really works. This book is a distillation of his experience that aims to educate and demystify. After reading this book, you will understand how money is created, how the global dollar system is structured, and how it all fits into the broader financial system. The views in this book do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System.
Author: Mr.Manmohan Singh
Publisher: International Monetary Fund
ISBN: 1463923953
Category : Business & Economics
Languages : en
Pages : 26
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Book Description
Large banks and dealers use and reuse collateral pledged by nonbanks, which helps lubricate the global financial system. The supply of collateral arises from specific investment strategies in the asset management complex, with the primary providers being hedge funds, pension funds, insurers, official sector accounts, money markets and others. Post-Lehman, there has been a significant decline in the source collateral for the large dealers that specialize in intermediating pledgeable collateral. Since collateral can be reused, the overall effect (i.e., reduced ?source' of collateral times the velocity of collateral) may have been a $4-5 trillion reduction in collateral. This decline in financial lubrication likely has impact on the conduct of global monetary policy. And recent regulations aimed at financial stability, focusing on building equity and reducing leverage at large banks/dealers, may also reduce financial lubrication in the nonbank/bank nexus.
Author: Mr.Manmohan Singh
Publisher: International Monetary Fund
ISBN: 1498312799
Category : Business & Economics
Languages : en
Pages : 21
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Book Description
In global financial centers, short-term market rates are effectively determined in the pledged collateral market, where banks and other financial institutions exchange collateral (such as bonds and equities) for money. Furthermore, the use of long-dated securities as collateral for short tenors—or example, in securities-lending and repo markets, and prime brokerage funding—impacts the risk premia (or moneyness) along the yield curve. In this paper, we deploy a methodology to show that transactions using long dated collateral also affect short-term market rates. Our results suggest that the unwind of central bank balance sheets will likely strengthen the monetary policy transmission, as dealer balance-sheet space is now relatively less constrained, with a rebound in collateral reuse.
Author: Philip Rush
Publisher: Springer
ISBN: 1349952788
Category : Business & Economics
Languages : en
Pages : 197
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Book Description
This book provides a framework for understanding the economics that drive markets, enabling investment professionals to understand the reality of markets and models, and to ‘be where the profits are’. Economics is about the allocation of resources, so it is at the heart of markets. And yet to many, economics is a field that feels far removed from the realities of what they see trading. Common sense, some entrepreneurial intuition and a decent dose of luck might seem like the only tools one needs to navigate a profitable course, especially when approaching a new financial market. This is, however, a weak framework. It is one where inconsistencies can thrive, cancelling out the rewards of erstwhile successful views or leaving no protection when risks crystallize. Of course, luck is always welcome, but there is no accounting for it. Relying on luck for returns is to make those returns completely un-replicable and thus unstable – a recipe for an unintentionally short relationship with real markets. A robust framework is needed instead. Split into three parts, Real Market Economics first builds the core framework of economic concepts, starting with real levels of activity before turning to growth in it and then prices, ending with the dynamics of business cycles. Part two adds on the stabilizing crossbeams, including the new macroprudential policies next to the more conventional monetary and fiscal ones. It then addresses how we might watch and anticipate policy changes. Finally, part three liberally coats the framework with financial markets, thereby making the completed framework's robust structure truly useful for investing in real markets.
