In recent years, the liquidity premium between the Norwegian krone (NOK) and the US dollar (USD) in the FX swap market, the so-called OIS basis, has accounted for a larger share of the Nibor premium than earlier. This has been attributed by several to low structural liquidity and banks'...

Record-high payments of petroleum tax in October 2022, and the accompanying fall in structural liquidity, resulted in a marked rise in the shortest-term Norwegian money market rates. In this staff memo we describe how petroleum tax payments affect liquidity in the banking system and discuss why...

Repo auctions are used to inject central bank funds against collateral into the banking sector. The ECB uses standard discriminatory auctions and hundreds of banks participate. The amount auctioned over the monthly reserve maintenance period is in principle exactly what banks collectively need...

We identify frictions in the market for liquidity as well as bank-specific and market-wide factors that affect the prices that banks pay for liquidity, captured here by borrowing rates in repos with the central bank and benchmarked by the overnight index swap. We have price data at the...

The interbank money market plays a key role in the execution of monetary policy. Hence, it is important to know the functioning of this market and the determinants of the interbank money market rate. In this paper, we develop an interbank money market model with a heterogeneous banking sector....

This paper investigates the ability of the Federal Reserve to manipulate the overnight rate without open market operations (which Demiralp and Jorda (2000) term the announcement effect), using high-frequency, open-market-desk data. Using similar data, Hamilton (1997) takes advantage of forecast...

We discuss the prospects for Chinese money market development and transition to market-based monetary policy operations based on a comparative historical analysis of the present Chinese situation and the development in 11 European countries from 1979 up to the launch of European Economic and...