Collateral and Monetary Policy

Manmohan Singh

No 2013/186, IMF Working Papers from International Monetary Fund

Abstract: Financial lubrication in markets is indifferent to margin posting via money or collateral; the relative price(s) of money and collateral matter. Some central banks are now a major player in the collateral markets. Analogous to a coiled spring, the larger the quantitative easing (QE) efforts, the longer the central banks will impact the collateral market and associated repo rate. This may have monetary policy and financial stability implications since the repo rates map the financial landscape that straddles the bank/nonbank nexus.

Keywords: WP; release rate; re-use rate; intermediation function; collateral market; market participant; pledged collateral; velocity of collateral; IS/LM; quantitative easing; central banks; repo rate; repo curve; collateral rate; release to nonbank; Collateral; Repo rates; Central bank policy rate; Financial statements; Unconventional monetary policies; Europe; Africa (search for similar items in EconPapers)
Pages: 17
Date: 2013-08-28
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Citations: View citations in EconPapers (9)

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