The longer term refinancing operations of the ECB

Arbeitspapier

This paper employs individual bidding data to analyze the empirical performance of the longer term re?nancing operations (LTROs) of the European Central Bank (ECB). We investigate how banks’ bidding behavior is related to a series of exogenous variables such as collateral costs, interest rate expectations, market volatility and to individual bank characteristics like country of origin, size and experience. Panel regressions reveal that a bank’s bidding depends on bank characteristics. Yet, different bidding behavior generally does not translate into differences concerning bidder success. In contrast to the ECB’s main re?nancing operations, we ?nd evidence for the winner’s curse effect in LTROs. Our results indicate that LTROs do neither lead to market distortions nor to unfair auction outcomes.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 359

Classification and Topics

• Classification: Wirtschaft ; Monetary Policy ; Auctions
• Subject: Auctions ; Monetary Policy Instruments ECB ; Winner’s Curse

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Linzert, Tobias ; Nautz, Dieter ; Bindseil, Ulrich
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/152793