Summary Understanding the factors determining overnight rates is crucial both for central bankers and private market participants, since, assuming the validity of the expectation theory of the term structure of interest rates, expectations with regard to this “monadic” maturity should...

Summary The OMT programme has been strongly criticized as being incompatible with the ECB’s mandate. Applying standard lender of last resort (LoLR) theory in the assessment of the OMT we find that when de facto operating as a LoLR for governments, the ECB is as much is line with its mandate as...