ECB interest rate policy and the “zero lower bound”

Stefan Gerlach, John Lewis 27 July 2010

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Since the start of the financial crisis, central banks across the world have cut interest rates substantially. In Japan, the US, the Eurozone and elsewhere, short-term interest rates controlled by the central bank are at or close to zero.

There are two reasons why this may have happened.

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Topics:  Global crisis

Tags:  ECB, monetary policy, global crisis, zero lower bound

The ECB: Gestures and credibility

Guido Tabellini 26 May 2010

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The currency crisis that is affecting Europe is fuelled by several economic factors such as the fear of insolvency by Greece, low growth and deficits in southern Europe,

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Topics:  Europe's nations and regions

Tags:  ECB, Fiscal crisis, Eurozone crisis

Monetary policy in exceptional times and the economic implications of phasing out in the Eurozone

Michele Lenza, Lucrezia Reichlin 16 February 2010

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In response to the global financial crisis, central banks have reacted in a number of novel and innovative ways. Recently, some economists have started to assess the effects of these measures (e.g. Taylor and Williams 2008 for the effects of Fed policies on money market spreads) while others have suggested a framework to analyze the non standard policies in the new Keynesian monetary model (see Cardia and Woodford, 2010).

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Topics:  Monetary policy

Tags:  ECB, monetary policy, market spreads

Eurozone monetary policy in uncharted waters

Emil Stavrev, Martin Cihák, Thomas Harjes 15 January 2010

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In response to the financial crisis and its fallout on economic activity, inflation, and inflation expectations, central banks around the globe flooded markets with liquidity and slashed interest rates to unprecedented low levels. The ECB led the way in actively providing financial markets with massive amounts of liquidity. After the real impact of the crisis had become apparent, the ECB cut its policy rate, reducing it to an all time low of 1% by early 2009.

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Topics:  Macroeconomic policy

Tags:  ECB, eurozone, monetary policy

Adjustments to the accountability and transparency of the European Central Bank

Sylvester Eijffinger 24 October 2009

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It is widely agreed that central banking should not be subject to "political business cycles". Consequently, in the last decades, it has become an integral part of modern central banking policy that full operational (or functional) independence of central banks is a welfare-enhancing quality. However, the objectives of the central bank should then be clearly defined from the outset, the bank should be accountable for its actions, and the public should have a solid trust in its actions. The ongoing crisis may well have made central banking more complicated.

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Topics:  EU institutions

Tags:  ECB, Central Banks, financial supervision

Multinational banks and European financial integration: Lessons for supervision and regulation

Giorgio Barba Navaretti, Giacomo Calzolari, Guido Ferrarini, Alberto Franco Pozzolo 08 April 2009

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Multinational banks are a crucial piece of the puzzle in the flurry of proposals for European financial reform. The size and cross-border operations of these institutions are seen by some as amplifying the effects of wrong management choices and practices and making the current crisis more systemic. That has cast doubts on the viability of this business model in the post-crisis world.

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Topics:  EU policies

Tags:  ECB, EU, banking regulation

Europe in the eye of a crisis

Lans Bovenberg, Coen Teulings 04 April 2009

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Europe is now at a crossroads: either closer political integration will support European economic integration or European markets will disintegrate at the cost of falling standards of living and rising international political tensions. It would not be the first time that a crisis compels Europe to take a step further on the road to closer political cooperation, as Avinash Persaud has argued on Vox.

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Topics:  EU policies Global crisis

Tags:  ECB, EU, Banking crisis

Keep it simple

Carmine Di Noia, Stefano Micossi 01 April 2009

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Tomorrow’s G20 meeting in London should not try to resolve everything. It must concentrate on what is urgent and, for the rest, start a process capable of producing a consensus on what must be corrected in the global governance of the economy and financial markets within reasonable deadlines.

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Topics:  EU policies Global crisis Global governance

Tags:  ECB, financial regulation, G20

Fiscal dimensions of central banking: the fiscal vacuum at the heart of the Eurosystem and the fiscal abuse by and of the Fed: Part 2

Willem Buiter 25 March 2009

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The Bank of England

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Topics:  Monetary policy

Tags:  ECB, Fed, Bank of England, fiscal backing

Fiscal dimensions of central banking: the fiscal vacuum at the heart of the Eurosystem and the fiscal abuse by and of the Fed: Part 3

Willem Buiter 25 March 2009

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An entirely valid reason for the ECB/Eurosystem to refuse to engage in either outright purchases of private securities or in unsecured lending to the banking sector (or to the non-financial enterprise sector directly), is that there is no ‘fiscal Eurozone’ – just as there is no fiscal EU. The absence of a fiscal Europe that matters here is a narrow one.

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Topics:  Monetary policy

Tags:  ECB, Eurosystem, fiscal Europe, wnt

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