The dangers of ultra-low interest rates in Europe

Negative nominal interest rates and term premia are an issue for financial stability in Europe, according to a recent speech by the Deputy General...

An updated guide to ECB non-conventional monetary policy

The ECB now runs one of the most complex monetary policy regimes. Beyond regular liquidity supply, its operating framework features long-term full-allotment refinancing operations, generous collateral acceptance,...

Understanding the U.S. monetary policy framework

A new staff paper summarizes the Federal Reserve’s policy framework, as it evolved in the face of the zero lower bound for interest rates....

Understanding the ECB’s latest tool: TLTROs

On 5 June 2014 the European Central Bank announced Targeted Long-Term Repo Operations (TLTROs]. Their main purpose is to stimulate bank lending to non-financial...

The impact of non-conventional monetary policy on financial markets

The April 2013 IMF Global Financial Stability Report takes stock of the market impact of non-conventional central bank policies. In particular, the latter have replaced...

Falling oil prices and the risk for zero-rate economies

A Bank of Italy paper illustrates the detrimental effect of a “negative cost push shock” (for example a commodity price drop) on an economy...

The four components of long-term bond yields

A BOJ paper proposes an affine terms structure model for bond yields under consideration of the zero lower bound. It estimates the contribution of...

The “collateral channel” of monetary policy

The importance of collateralized transactions for the global financial system has greatly increased since the financial crisis. Moreover, the influence of central banks on...

ECB policy framework in six basic points

The European Central Bank is one of the most powerful institutions in the world and is running a particularly complex policy framework. For macro...

The Federal Reserve’s increased influence on financial markets

A new empirical study suggests that the Federal Reserve has exerted a stronger influence on fixed income, commodity, and currency markets since it started...

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