The Daily Market for Funds in Europe: What Has Changed with the EMU?

Gabriel Perez Quiros and Hugo Rodriguez Mendizabal

Journal of Money, Credit and Banking, 2006, vol. 38, issue 1, 91-118

Abstract: This paper shows that the existence of deposit and lending facilities combined with an averaging provision for the reserve requirement are powerful tools to stabilize the overnight rate. We reach this conclusion by comparing the behavior of this rate in Germany before and after the start of the EMU. The analysis of the German experience allows us to isolate the effects on the overnight rate of these particular instruments of monetary policy. To illustrate that this outcome is a general conclusion and not a particular result of the German market, we develop a theoretical model of reserve management, which is able to reproduce our empirical findings.

Date: 2006
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Related works:
Working Paper: The Daily Market for Funds in Europe: What has Changed with the EMU? (2015)
Working Paper: The Daily Market for Funds in Europe: What Has Changed with the EMU? (2003)
Working Paper: The daily market for funds in Europe: what has changed with the EMU (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:mcb:jmoncb:v:38:y:2006:i:1:p:91-118

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