Search results

We show that bond purchases undertaken in the context of quantitative easing efforts by the European Central Bank created a large mispricing between the market for German and Italian government bonds and their respective futures contracts. On top of the direct effect the buying pressure exerted on bond prices, we show three indirect channels through which the scarcity of bonds, resulting from the asset purchases, drove a wedge between the futures contracts and the underlying bonds: the deterioration of bond market liquidity, the increased bond specialness on the repurchase agreement market, and the greater uncertainty about bond availability as collateral. ; This version: October 2018

TWO RECENT STUDIES USE HISTORY AND THEORY TO EXAMINE THE LIKELY CONSEQUENCES OF ELIMINATING GOVERNMENT INTERVENTION IN THE PROVISION OF MONEY. SUCH PROPOSALS WOULD END THE CENTRAL BANK MONOPOLY OVER NOTE ISSUE AND REPLACE IT WITH NOTE ISSUES BY COMPETING BANKS. SUPERVISORY FUNCTIONS OF CENTRAL BANKS WOULD BE DISPENSED WITH. ACCORDINGLY, THE PROPOSALS WOULD FREE BANKS FROM ALL REGULATIONS ON ENTRY, DISCLOSURE, GEOGRAPHICAL LIMITATIONS, AND THE PRODUCTS THEY MAY OFFER TO CUSTOMERS. MONETARY AND BANKING ARRANGEMENTS WOULD BE LEFT TO THE MARKET. UNFORTUNATELY, THE HISTORICAL EVIDENCE DOES NOT SPEAK AS LOUDLY IN FAVOR OF FREE BANKING AS ITS PROPONENTS CLAIM.

Monetary policy measures in reaction to the Global Financial Crisis and the COVID-19 pandemic have resulted in unprecedented (re)distributional effects. In addition, Central Bank (CB) interventions have been conceptualized as targeted measures favouring certain market participants compared to others. Against this background, discussions about CBs and inequality have sparked in the economic and legal literature. The article takes up this discourse and sheds light on the different aspects of equality within monetary policy: equality as an objective of monetary policy, equality and inequality considerations with regard to the design of monetary policy measures, and equality and inequality as side effects of monetary policy and the interaction between inequality and the monetary policy transmission. The aim is to provide a structural analysis of how the notion of equality is embedded in the mandate of the ECB and how it translates into legal requirements with regard to the implementation of monetary policy measures.
Central Banks, inequality, ECB, monetary policy, global financial crisis, COVID-19

This article covers a little-known period of Raul Prebisch's life, when he was a chairman of the Central Bank of Argentina. Particular attention is devoted to the steps that were taken to put the banks on a sounder footing and to streamline the banking system, as well as the banking law and the supervision, the formation of a securities market, rediscounting operations and exchange policy. Finally, the author takes a look at the lessons to be drawn from Prebisch's handling of monetary affairs with a view of their application to the present situation

In this paper, we survey the case for central bank independence (CBI). We conclude that CBI is neither necessary nor sufficient for monetary stability. CBI is just one potentially useful monetary policy design instrument among several, & CBI should not be treated as an exogenous variable. Instead, the question that should be addressed is why societies decide to make their central banks independent? The reasons why CBI is chosen are related to legal, political, & economic systems. A number of empirical studies find correlations between CBI & low inflation rates. Endogeneity of CBI suggests, however, that the correlation has no implications for causality. 106 References. Adapted from the source document.