Financial Plumbing and Monetary Policy

Financial Plumbing and Monetary Policy
Author: Mr.Manmohan Singh
Publisher: International Monetary Fund
Total Pages: 18
Release: 2014-06-20
Genre: Business & Economics
ISBN: 1498367135

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This paper focuses on how changes in financial plumbing of the markets may impact the monetary policy options as central banks contemplate lift off from zero lower bound (ZLB). Under the proposed regulations, banks will face leverage ratio constraints. As a result of quantitative easing (QE), banks want balance sheet “space” for financial intermediation/ non-depository activities. At the same time, regulatory changes are boosting demand for high quality liquid assets. The paper also discusses the role of repo markets and the importance of collateral velocity and the need to avoid wedges between repo and monetary policy rates when leaving ZLB.

Collateral and Financial Plumbing

Collateral and Financial Plumbing
Author: Manmohan Singh
Publisher:
Total Pages: 228
Release: 2016
Genre: Credit
ISBN: 9781782723172

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Collateral is one of the building blocks on which the financial markets are constructed. Used for a number of purposes--including trading with central counterparties (CCPs), secured funding with market counterparties and central banks, OTC derivatives margining and settlement--the role of effective collateral management in monetizing assets has never been more important. Until now, policymakers have tended to ignore the complex collateral plumbing that is fundamental to lending and enabling growth in the economy. Attention is now focused on this important issue. Manmohan Singh leads you through this complex subject highlighting the importance of financial plumbing and provides a practical understanding of how financial collateral moves across jurisdictions. Also, the discussion on restricting collateral velocity and how it links to monetary policy rate cycle is original. Now with two additional chapters covering the breakdown of financial plumbing and monetary policy transmission, this updated edition provides the insight and wisdom delivered in the first edition of this book, along with the latest techniques and know-how needed when monetizing assets. This is an essential guide to navigating the future as rules and regulations for the global financial markets are redrawn. Through a thorough examination of the role collateral plays in the market the reader will gain a deeper understanding of complex and important themes that are likely to remain topical in the near future.

The Great Financial Plumbing

The Great Financial Plumbing
Author: Karel Lannoo
Publisher: Rowman & Littlefield
Total Pages: 201
Release: 2015-09-30
Genre: Business & Economics
ISBN: 1783484292

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The financial crisis has led to a far-reaching redesign of the European regulatory and supervisory framework. Following the commitments made in the context of the G-20, but also reacting to internal shortcomings, the EU engaged in a massive program to re-regulate financial markets. The EU furthermore redesigned the structure for supervisory cooperation, initially through the European Supervisory Authorities, and later in its ambition to form the Banking Union. In The Great Financial Plumbing, Karel Lannoo systematically assesses the new regulatory and supervisory framework. The book’s structure follows the big questions on the agenda: 1) What is Banking Union? 2) How have the concerns of the G-20 been addressed by the EU (oversight of credit-rating agencies, better capital for banks, the re-regulation of securities and derivatives markets, asset management, depositor protection and bank resolution)? 3) How were uniquely EU rules on state aid applied to the banking sector? This book is designed to give professionals, policy-makers and students a better understanding of the new regulatory framework and insights into the policy context that has led to the new rules governing financial markets in Europe.

Managing the Fed’s Liftoff and Transmission of Monetary Policy

Managing the Fed’s Liftoff and Transmission of Monetary Policy
Author: Mr.Manmohan Singh
Publisher: International Monetary Fund
Total Pages: 20
Release: 2015-09-23
Genre: Business & Economics
ISBN: 1513551256

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In recent years, many money and repo rates in the United States have been between zero and 25 basis points. As Fed’s liftoff approaches, the question of the level of these rates (and the markets that determine them) becomes increasingly important. The paper discusses (i) whether the Fed can control short–term rates as it starts to tighten; and (ii) what are the advantages and disadvantages of using asset sales versus a large reverse repo program (RRP). A large RRP by the Fed will deprive the financial system of the money pool (i.e., GSEs and money market funds) as the Fed will directly absorb the money on to its balance sheet. This will rust the financial plumbing that connects the money pool to collateral suppliers. Some asset sales may be preferred to a large RRP as this will result in a market-determined repo rate and will allow the Fed to reach its monetary policy liftoff objectives with minimal footprint on market plumbing. We also discuss cost of issuing short tenor T-bills relative to a large RRP in a rising rate environment.

Collateral and Financial Plumbing

Collateral and Financial Plumbing
Author: Manmohan Singh
Publisher:
Total Pages: 211
Release: 2016
Genre: Credit
ISBN:

Download Collateral and Financial Plumbing Book in PDF, Epub and Kindle

Collateral is one of the building blocks on which the financial markets are constructed. Used for a number of purposes--including trading with central counterparties (CCPs), secured funding with market counterparties and central banks, OTC derivatives margining and settlement--the role of effective collateral management in monetizing assets has never been more important.

Financial Plumbing and Monetary Policy

Financial Plumbing and Monetary Policy
Author: Mr.Manmohan Singh
Publisher: International Monetary Fund
Total Pages: 18
Release: 2014-06-20
Genre: Business & Economics
ISBN: 1498330614

Download Financial Plumbing and Monetary Policy Book in PDF, Epub and Kindle

This paper focuses on how changes in financial plumbing of the markets may impact the monetary policy options as central banks contemplate lift off from zero lower bound (ZLB). Under the proposed regulations, banks will face leverage ratio constraints. As a result of quantitative easing (QE), banks want balance sheet “space” for financial intermediation/ non-depository activities. At the same time, regulatory changes are boosting demand for high quality liquid assets. The paper also discusses the role of repo markets and the importance of collateral velocity and the need to avoid wedges between repo and monetary policy rates when leaving ZLB.

Issues in Monetary Policy

Issues in Monetary Policy
Author: Kent Matthews
Publisher: John Wiley & Sons
Total Pages: 210
Release: 2006-02-22
Genre: Business & Economics
ISBN: 0470032812

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Since the Bank of England was made independent in 1997, the conduct of monetary policy has been relatively uncontroversial. The debates between Keyneisans, monetarists and supporters of fixed exchange rate mechanisms now appear very distant. Despite the apparent consensus there are many issues related to the conduct of monetary policy that are not yet settled and which will soon come to the fore. Is the current form of independence for the Bank of England appropriate? Should a central bank target inflation or the prices level? How does a central bank deal with asset price deflation? Should more account be taken of monetary aggregates? Should central banks target asset prices? What is the relationship between the money supply and asset price inflation? How should central banks ensure financial stability? The IEA was at the forefront of changing the parameters of the debate surrounding monetary policy in the 1970s and 1980s. This text, brings together some of the leading authors in the field, including the current Governor of the Bank of England, to discuss current issues in monetary policy and the relationship between monetary policy and financial markets. It is appropriate for undergraduates and postgraduates in economics and finance as well as for practitioners in financial markets.

Central Banking 101

Central Banking 101
Author: Joseph Wang
Publisher: Joseph Wang
Total Pages: 196
Release: 2020-01-18
Genre: Business & Economics
ISBN: 0999136755

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Central banking is magic. With a few words, the Fed can lift the stock market out of desperation and catapult it towards euphoric highs. With a few keystrokes, the Fed can conjure up trillions of dollars and fund virtually unlimited Federal spending. And with a few poor decisions, the Fed can plunge the entire world into a recession. The Federal Reserve is one of the most powerful institutions in the world, and also one of the most difficult to understand. The Fed acts through its Open Markets Desk, which sits at the heart of the global financial system as the world’s ultimate and limitless provider of dollars. On behalf of policy makers, the Desk gathers market intelligence from all the major market participants, sifts through reams of internal data, and works behind the scenes keep the financial system intact. It is responsible for all of the Fed's market operations, from trillions in quantitative easing to hundreds of billions in repo and FX-swap loans. The financial crises of 2008 and 2020 abated only through the emergency interventions of the Desk. Joseph Wang spent five years studying the monetary system as a trader on the Desk. From that vantage point, Joseph saw firsthand how the Fed operates and how the financial system really works. This book is a distillation of his experience that aims to educate and demystify. After reading this book, you will understand how money is created, how the global dollar system is structured, and how it all fits into the broader financial system. The views in this book do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System.

Modernizing China

Modernizing China
Author: W. Raphael Lam
Publisher: International Monetary Fund
Total Pages: 392
Release: 2017-01-14
Genre: Business & Economics
ISBN: 1513539949

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China is at a critical juncture in its economic transformation as it tries to rebalance what is generally seen as an exhausted growth model. A unifying theme across the reforms that will deliver this transformation is that it can no longer be achieved by raising the amount of physical investment and government direction of resource allocation. Instead China is building a new set of policy frameworks that will allow markets to function more effectively—not unfettered markets, but markets that work efficiently, in line with broad social and other policy goals, and in a sustainable way. Hence, China is now building a new soft infrastructure, that is, the institutional plumbing that underpins and guides the functioning of markets as the key organizing principle toward achieving sustained economic and social progress. Against this background, this volume provides policymakers, academics, and the public with valuable information about policies and institutions in China today. It also looks at the road ahead and key principles that can help China in navigating it. The book focuses on issues crucial in the country’s transformation, such as tax policy and administration, social security, state-owned enterprise reform, medium-term expenditure frameworks, the role of local government finances, capital account liberalization, and renminbi internationalization. As China moves toward a more price-based allocation of resources, strengthening monetary policy frameworks and financial sector regulation will be particularly important in channeling resources to the most productive sectors and minimizing the risks of financial sector stress. Also, upgrading statistical frameworks will be critical for macroeconomic policymaking and investors. Visit : http://www.elibrary.imf.org/page/modernizing-china

Recommendations for Central Counterparties

Recommendations for Central Counterparties
Author: Group of Ten. Committee on Payment and Settlement Systems
Publisher:
Total Pages: 80
Release: 2004
Genre: Clearing of securities
ISBN:

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