Challenges to Monetary Policy Implementation beyond the Financial Market Turbulence

Time: 30 November - 1 December 2009
Venue: Frankfurt am Main, Germany

A workshop sponsored by the European Central Bank. This workshop aims at discussing how, why and to what extent the money market was affected by the financial turbulence and at assessing how and to what extent the non-standard measures had the intended effects while checking for a possible interference with market functioning. The workshop would also aim at drawing lessons about the resilience of existing operational procedures and about the optimal design of operational frameworks.

Topics:

• Modelling the impact of the financial market turbulence on credit and money markets
  i. Modelling the money market yield curve and spreads: liquidity risk and credit risk premia; impact of liquidity policies on the yield curve.
  ii. The role of asymmetric information in the interbank market.
  iii. The relationship between money market rates and rates on bank lending to non-financial institutions.
  
• Lessons for the design of operational frameworks. For example:
  i. Reserve requirements: compulsory or voluntary? What is the role of averaging? Reserve band or exact fulfilment?
  ii. Refinancing by central banks: outright purchases versus repo operations; short-term versus longer-term repo operations
  iii. The optimal level of aggregate liquidity deficit
  iv. What is impact of central banks’ collateral frameworks on market incentives and functioning?

• Deadline of Submission: 18 September 2009
• Contact: Nuno Cassola (nuno.cassola@ecb.int), Cornelia Holthausen (cornelia.holthausen@ecb.int) or Stefano Nardelli (stefano.nardelli@ecb.int)
  

For more info http://www.ecb.int/...