Central Bank Collateral Policy: Insights from Recent Experience

Lorie Zorn and Alejandro Garcia

Bank of Canada Review, 2011, vol. 2011, issue Spring, 37-45

Abstract: The collateral policy of central banks played a critical role during the recent financial crisis, as they worked to bolster liquidity and alleviate the funding pressures facing financial institutions. This article examines central bank collateral policy and discusses three areas in which central banks can use their collateral policy to influence financial market practices: promoting greater transparency for securitized products, improving practices related to credit risk, and reducing procyclicality in the management of market risk.

Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:bca:bcarev:v:2011:y:2011:i:spring11:p:37-45

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