Between September 1998 and Spring 1999 the liquidity of the Hungarian inter-bank money market and the corresponding interest rates for overnight funds showed significantly larger fluctuations relative to the previous periods. This study aims to analyse the causes behind the imbalances...

This paper constructs an equilibrium model for the short-term money market, when the central bank provides liquidity via variable rate tenders. The relation between market rate of interest and liquidity is derived from a single bank’s profit maximisation problem in the interbank market, and...

This volume contains a collection of papers, commentaries and speeches that review the strategic and operational decisions taken by the central banks to combat the crisis and that reflect on the lessons for the future. The contributions are grouped around five broad topics: monetary policy...