Artikel
Demand for Reserves and the Central Bank's Management of Interest Rates
The implementation of monetary policy is prevalently done by interest rate targeting with a short term market rate serving as operational target. The instruments for achieving the operational target are the provision of reserves and the interest rate charged in these transactions. This paper presents a model for the estimation of the demand curve for reserves, derived from the central bank's fixed rate tender auction and the interbank money market. Using data from Switzerland, the slope of the demand curve is estimated. Furthermore, properties of the demand curve such as the slope patterns in the course of a maintenance period and the slope in different monetary regimes are assessed. We find a steeper demand curve towards the end of the maintenance period and an increasing slope when the general interest rate level is high. Further, we investigate the role of the Swiss National Bank's (SNB) interest rate in the fixed rate tender auctions. There is evidence that the SNB uses its auction rate to guide the interbank market rate.
- Language
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Englisch
- Bibliographic citation
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Journal: Swiss Journal of Economics and Statistics ; ISSN: 2235-6282 ; Volume: 148 ; Year: 2012 ; Issue: 4 ; Pages: 531-555 ; Heidelberg: Springer
- Classification
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Wirtschaft
Market Structure, Pricing, and Design: General
Demand for Money
Interest Rates: Determination, Term Structure, and Effects
Monetary Policy
- Subject
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Implementation of monetary policy
money demand
fixed rate tender auction
repo
Switzerland
- Event
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Geistige Schöpfung
- (who)
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Kraenzlin, Sébastien
Schlegel, Martin
- Event
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Veröffentlichung
- (who)
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Springer
- (where)
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Heidelberg
- (when)
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2012
- DOI
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doi:10.1007/BF03399377
- Handle
- Last update
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10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Kraenzlin, Sébastien
- Schlegel, Martin
- Springer
Time of origin
- 2012
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What determines commercial banks' demand for reserves in the interbank market?
Foreign reserves management subject to a policy objective
Interest, reserves, and prices
Risk management for Central Bank foreign reserves
Fiscal consequences of paying interest on reserves
Contingent reserves management: An applied framework
Demand for central bank reserves and monetary policy implementation frameworks: The case of the Eurosystem
Transmission of interest rate hikes depends on the level of central bank reserves held by banks
Risk Management of Demand Deposits in a Low Interest Rate Environment
Financial crises, capital liquidation and the demand for international reserves
International reserves management and the current account
International reserves management and the current account
What determines commercial banks' demand for reserves in the interbank market?
Foreign reserves management subject to a policy objective
Interest, reserves, and prices
Risk management for Central Bank foreign reserves
Fiscal consequences of paying interest on reserves
Contingent reserves management: An applied framework
Demand for central bank reserves and monetary policy implementation frameworks: The case of the Eurosystem
Transmission of interest rate hikes depends on the level of central bank reserves held by banks
Risk Management of Demand Deposits in a Low Interest Rate Environment
Financial crises, capital liquidation and the demand for international reserves
International reserves management and the current account
International reserves management and the current account
What determines commercial banks' demand for reserves in the interbank market?