{
  "title": "Collateral and Monetary Policy",
  "publication": "IMF Working Papers, August 28, 2013",
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  "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.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Financial lubrication in markets is indifferent to margin posting via money or collateral; the relative price(s) of money and collateral matter.\n- Some central banks are now a major player in the collateral markets.\n- 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.\n- This may have monetary policy and financial stability implications since the repo rates map the financial landscape that straddles the bank/nonbank nexus."
    },
    {
      "heading": "Key findings",
      "content": "- Financial lubrication is determined by the relative price(s) of money and collateral, not by whether margins are posted in money or collateral.\n- Central banks’ large-scale asset purchases (QE) affect the collateral market and associated repo rate for extended periods.\n- Repo rates serve as indicators that map the financial landscape across the bank/nonbank boundary."
    },
    {
      "heading": "Policy implications and considerations",
      "content": "- The prolonged central bank presence in collateral markets following QE operations can have both monetary policy and financial stability implications.\n- Monitoring repo rates is important because they reflect conditions across banks and nonbanks and thus bear on transmission and systemic risk."
    },
    {
      "heading": "Subjects and keywords (as listed)",
      "content": "- Subjects: Banking, Central bank policy rate, Collateral, Financial institutions, Financial services, Financial statements, Monetary policy, Public financial management (PFM), Repo rates, Unconventional monetary policies\n- Keywords: Africa, Central bank policy rate, central banks, Collateral, collateral market, collateral rate, Europe, Financial statements, intermediation function, IS/LM, market participant, pledged collateral, quantitative easing, re-use rate, release rate, release to nonbank, repo curve, repo rate, Repo rates, Unconventional monetary policies, velocity of collateral, WP\n\n---\n\n Content in this bundle\n\n- Collateral and Monetary Policy; by Manmohan Singh; IMF Working Paper 13/186; August 1, 2013\n  - Collateral and Monetary Policy; by Manmohan Singh; IMF Working Paper 13/186; August 1, 2013 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Collateral and Monetary Policy; by Manmohan Singh; IMF Working Paper 13/186; August 1, 2013 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/collateral-and-monetary-policy-40898"
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    "Authors: Manmohan Singh",
    "Published: August 28, 2013",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484384916.001",
    "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.",
    "Financial lubrication is determined by the relative price(s) of money and collateral, not by whether margins are posted in money or collateral.",
    "Central banks’ large-scale asset purchases (QE) affect the collateral market and associated repo rate for extended periods.",
    "Repo rates serve as indicators that map the financial landscape across the bank/nonbank boundary.",
    "The prolonged central bank presence in collateral markets following QE operations can have both monetary policy and financial stability implications.",
    "Monitoring repo rates is important because they reflect conditions across banks and nonbanks and thus bear on transmission and systemic risk.",
    "Subjects: Banking, Central bank policy rate, Collateral, Financial institutions, Financial services, Financial statements, Monetary policy, Public financial management (PFM), Repo rates, Unconventional monetary policies",
    "Keywords: Africa, Central bank policy rate, central banks, Collateral, collateral market, collateral rate, Europe, Financial statements, intermediation function, IS/LM, market participant, pledged collateral, quantitative easing, re-use rate, release rate, release to nonbank, repo curve, repo rate, Repo rates, Unconventional monetary policies, velocity of collateral, WP",
    "**Collateral and Monetary Policy; by Manmohan Singh; IMF Working Paper 13/186; August 1, 2013**"
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