, not defined in a market, but by the collateral frameworks and interest rate policies of central banks. Using the … in modern monetary and financial systems, namely central bank collateral frameworks. Their importance can be understood … collateral framework of the Eurosystem as a basis of illustration and case study, the paper brings to light the functioning …

Should central banks lend against low quality collateral? We characterize efficient central bank collateral policy in a … model where a bank borrows from the interbank market or the central bank. Collateral has favorable incentive effects but is … costly to transfer to lenders who value the collateral less because of imperfect collateral quality. We show that a fall in …

national liquidity requirement pledge more and less liquid collateral than banks with a preceding national liquidity …We analyze the pledging behavior of Euro area banks during the introduction of the liquidity coverage ratio (LCR). The … national liquidity requirements to proxy for banks' incentives to exploit this differential treatment of central bank eligible …

We study how the subjective beliefs about loan repayment on the side of liquidity-constrained banks affect the central … bank's choice of collateral standards in its lending facilities. Optimism on the side of banks, entailing a higher … banks' belief distortions and always induce the socially optimal allocation. Under uncertainty about beliefs, the central …

countries. This paper develops a two-country New Keynesian model { calibrated to represent a high- and a low-liquidity euro area …. These dampening effects are higher in the high-liquidity country. We find similar results in response to a monetary policy …

pledged vs new collateral, and the second approach compares the liquidity profile of the pool of pledged securities with banks … Eurosystem against non-HQLA collateral. This paper quantifies the extent of this liquidity transformation and finds that on …' total eligible securities holdings. Both approaches show that banks use their least liquid assets as collateral first and …

The ECB has accepted increasing amounts of rubbish collateral since the crisis started leading to exposure to serious … losses. Thirdly, the ECB can draw on substantial reserves of the euro area national banks. …

that banks were able to lend long since they enjoyed liquidity insurance by the central bank. Although a large literature …Using a large eligibility shock, I show that liquidity insurance by the central bank has significant real effects …. Large-scale rating of non-public French firms, whose credit claims can be deposited as collateral at the central bank …

The paper studies the central bank collateral framework and its impact on banks’ liquidity under an adverse stress test … scenario. We construct a stress test model that accounts for a granular and multi-faceted representation of the liquidity of … marketable and non-marketable assets. In particular, the model analyses banks’ strategic decisions to mobilise assets through …

The paper studies the central bank collateral framework and its impact on banks' liquidity under an adverse stress test … scenario. We construct a stress test model that accounts for a granular and multi-faceted representation of the liquidity of … marketable and non-marketable assets. In particular, the model analyses banks' strategic decisions to mobilise assets through …