Extension of existing central bank swap arrangements

Other Relevant Crises: Global Financial Crisis (2007-2009

Overnight interbank markets and the determination of the interbank rate: a selective survey

Overnight interbank markets provide critical facilities for the banking system to manage, pool and redistribute its cash reserves. We provide a selective survey of the literature on overnight interbank markets. We outline the typical structure of overnight markets, including the networking relationships involved, as an indispensable prerequisite for a clear understanding of the workings of these markets. We review the theoretical and empirical studies on the determination of the overnight rate, and in that context discuss the implications of the 2007–08 financial crisis. We summarise key issues for further research

New Economy, Old Central Banks?

Proponents of the so-called New Economy claim that it entails a structural change of the economy. Such a change, in turn, would require the central bank to rethink its monetary policy to the extent that traditional relationships between inf1ation and economic growth are no longer valid. But such a rethinking presupposes that prospective advances in information technology and other factors associated with the new economy do not threaten the capacity of central banks to stabilise the general level of prices. It is the aim of this paper to shed some light on the latter, by analysing the monetary transmission mechanism in a 'new economy' environment. We argue that, although the form of central bank instruments and current methods for implementing monetary policy may change, the goals that the policy makers try to achieve by employing these instruments remain valid, and achievable

Variety of Methodological Approach in Economics

It has been argued by some that the distinction between orthodox economics and heterodox economics does not fit the growing variety in economic theory, unified by a common methodological approach. On the other hand, it remains a central characteristic of heterodox economics that it does not share this methodological approach, but rather represents a range of alternative methodological approaches. The paper explores the evidence, and arguments, for variety in economics at different levels, and a range of issues which arise. This requires in turn a discussion of the meaning of variety in economics at the different levels of reality, methodology, method and theory. It is concluded that there is scope for more, rather than less, variety in economic methodologies, as well as within methodologies. Further, if variety is not to take the form of “anything goes”, then critical discussion by economists of different approaches to economics, and of variety itself, is required

European Central Bank Swap Line Agreement

Other Relevant Crises: Global Financial Crisis (2007-2009