Excess reserves and implementation of monetary policy of the ECB

Ulrich Bindseil, Gonzalo Camba-Mendez, Astrid Hirsch and Benedict Weller

No 361, Working Paper Series from European Central Bank

Abstract: This paper explains to what extent excess reserves are and should be relevant today in the implementation of monetary policy, focusing on the specific case of the operational framework of the Eurosystem. In particular, this paper studies the impact that changes to the operational framework for monetary policy implementation have on the level and volatility of excess reserves. A 'transaction costs' model that replicates the rather specific intra-reserve maintenance period pattern of excess reserves in the euro area is developed. Simulation results presented not only show that excess reserves may increase considerably under some changes to the operational framework, but also that their volatility and hence unpredictability could. JEL Classification: E52, E58

Keywords: excess reserves; liquidity management; monetary policy implementation (search for similar items in EconPapers)
Date: 2004-05
Note: 327704
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp361.pdf (application/pdf)

Related works:
Journal Article: Excess reserves and the implementation of monetary policy of the ECB (2006)
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:ecb:ecbwps:2004361

Access Statistics for this paper

More papers in Working Paper Series from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().