Record Details

Central bank forecasts of liquidity factors and the control of short term interest rates

PSL Quarterly Review

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Title Central bank forecasts of liquidity factors and the control of short term interest rates
 
Creator Bindseil, Ulrich
 
Subject —
Interest Rates, Interest
E52, E58, E43
 
Description A simple model of the interaction between central bank liquidity management and the inter-bank overnight rate is suggested, which allows analysing the publication of forecasts of liquidity factors by the European Central Bank adopted in June 2000. The paper argues that the main practical advantage of the publication of these forecasts is that it makes the signal extraction problem with regard to the centralbank's intentions trivial and hence allows establishing a superior behavioural equilibrium between the central bank and the money market participants. In this equilibrium, the central bank can achieve a better steering of overnight rates than under private autonomous factor forecasts, depending of course also on the quality of liquidity forecasts. It is furthermore shown that the publication of an average of autonomous factors, such as adopted by the ECB, is, at least within the model presented, superior to the separate publication of autonomous factors for each single day.   JEL Codes: E52, E58, E43Keywords: Interest Rates, Interest
 
Publisher Economia civile
 
Contributor —
 
Date 2012-04-19
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
—
 
Format application/pdf
 
Identifier http://annalidibotanica.uniroma1.it/index.php/PSLQuarterlyReview/article/view/9902
 
Source PSL Quarterly Review; Vol 55, No 220 (2002)
PSL Quarterly Review; Vol 55, No 220 (2002)
2037-3643
ISSN 2037-3635
 
Language eng
 
Relation http://annalidibotanica.uniroma1.it/index.php/PSLQuarterlyReview/article/view/9902/9784
 
Rights Copyright (c) 2016 Ulrich Bindseil
http://creativecommons.org/licenses/by-nc-nd/4.0