Artikel
What problem is post-crisis QE trying to solve?
What problem the Fed and other central banks are solving by printing money and letting interest rates fall to zero is the focus of this paper. This activity does not appear to affect nominal GDP or inflation prior to COVID, and yet central bank liabilities have continued to rise. This suggests the presence of rising cash demand that has prevented excess cash and inflation pressures from emerging. While there was some hope that quantitative easing would be a new instrument in addition to interest rates as far as monetary policy goals were concerned, this has not proved to be the case. Instead, banking system demand for central bank liabilities keeps rising as an endogenous response to the changed business models of banks forced on them by post-crisis re-regulation and extremely low interest rates. These ideas were tested with cointegration and error correction econometric techniques. Examples of the growing risk of leverage and counterparty risks in this disequilibrium process are provided.
- Sprache
-
Englisch
- Erschienen in
-
Journal: Journal of Risk and Financial Management ; ISSN: 1911-8074 ; Volume: 15 ; Year: 2022 ; Issue: 2 ; Pages: 1-17 ; Basel: MDPI
- Klassifikation
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Wirtschaft
- Thema
-
monetary policy
quantitative easing
financial regulation
Liquidity Coverage Ratio
demand for bank reserves
central bank money
cointegration
Archegos
derivatives
rehypothecation
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Atkinson, Paul E.
Blundell-Wignall, Adrian
- Ereignis
-
Veröffentlichung
- (wer)
-
MDPI
- (wo)
-
Basel
- (wann)
-
2022
- DOI
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doi:10.3390/jrfm15020040
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Artikel
Beteiligte
- Atkinson, Paul E.
- Blundell-Wignall, Adrian
- MDPI
Entstanden
- 2022
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