Do monetary policy expectations influence transmission mechanism of Danish interbank market under the negative interest rate policy?

Takayasu Ito

International Journal of Bonds and Derivatives, 2017, vol. 3, issue 3, 223-234

Abstract: In Denmark, monetary policy expectations have some impact on the interbank interest rates in the maturities of one, three and six months. The Danish central bank is successful, to some extent, in influencing the interbank interest rates in the maturities from one to six months through communication with financial markets. But the maturities from nine to 12 months are beyond their control. This fact indicates that market segmentation is observed in the short-term money market in Denmark. The ordinary transmission mechanism of interbank interest rates does not function because of the increased fluctuations in money market rates under a negative interest rate policy. It is therefore suggested that a negative interest rate policy presents complications that could limit policy effectiveness. Negative interest rate policy presents complications that could limit policy effectiveness.

Keywords: interbank interest rate; Denmark; monetary policy expectations; negative interest rate policy. (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=88512 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbder:v:3:y:2017:i:3:p:223-234

Access Statistics for this article

More articles in International Journal of Bonds and Derivatives from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().