ECB non-standard monetary measures, collateral constraints and potential risks for monetary policy
This paper takes a wide view of nonstandard measures in difficult situations. We explore how, and to what extent, prudential metrics written into the new prudential and surveillance regulations can be used as policy instruments. The paper does not try to reach a judgment on which measures will work best. Instead we explore how these policies work; why they depend on high quality collateral/assets; what happens if policymakers are driven to expand the bounds of “sufficient quality or liquidity”; how new credit risks arise and for whom. Some of these risks are quite subtle, implicit or indirect. But they all reduce the effective-ness of the measures in question (a transmission problem). As a result, they require larger interventions to reach certain target values (a feasibility question, given the side effects). Thus, the new prudential regulation regimes offer several nonstandard policy instruments. But they depend of the availability of high quality and liquid collateral/assets. Poor collateral makes nonstandard measures less effective. Less credit and less cheap credit will be offered due to the increasing credit risks. This document was provided by Policy Department A at the request of the Economic and Monetary Affairs Committee.
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Autor externo
Andrew Hughes Hallett, Paul Fisher
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Tipo de publicación
Ámbito político
Palabra clave
- ASUNTOS FINANCIEROS
- balance
- banco central
- Banco Central Europeo
- control de liquidez
- economía monetaria
- EMPRESA Y COMPETENCIA
- euromercado
- gestión contable
- instituciones de la Unión Europea y función pública europea
- INTERCAMBIOS ECONÓMICOS Y COMERCIALES
- libre circulación de capitales
- mercado financiero
- política comercial
- política monetaria única
- relaciones monetarias
- UNIÓN EUROPEA
- vigilancia del mercado
- zona euro