Collateral and Monetary Policy

Author/Editor:

Manmohan Singh

Publication Date:

August 28, 2013

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Financial lubrication in markets is indifferent to margin posting via money or collateral; the relative price(s) of money and collateral matter. Some central banks are now a major player in the collateral markets. Analogous to a coiled spring, the larger the quantitative easing (QE) efforts, the longer the central banks will impact the collateral market and associated repo rate. This may have monetary policy and financial stability implications since the repo rates map the financial landscape that straddles the bank/nonbank nexus.

Series:

Working Paper No. 13/186

Subject:

English

Publication Date:

August 28, 2013

ISBN/ISSN:

9781484384916/1018-5941

Stock No:

WPIEA2013186

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

17

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