{
  "title": "ECB Euro Liquidity Lines",
  "publication": "IMF Working Papers, May 5, 2023",
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  "summary": "Central bank liquidity lines have gained momentum since the global financial crisis as a crosscurrency liquidity management tool. We provide a complete timeline of the ECB liquidity line announcements and study their signalling and spillback effects.",
  "sections": [
    {
      "heading": "Core summary and motivation",
      "content": "- Central bank liquidity lines have gained momentum since the global financial crisis as a cross-currency liquidity management tool.\n- The paper provides a complete timeline of the ECB liquidity line announcements and studies their signalling and spillback effects.\n- Consistent with a stylized model, announcements and market reactions are analyzed to assess effects on FX premia and bank equity prices."
    },
    {
      "heading": "Key empirical findings",
      "content": "- The announcement of an ECB euro liquidity line decreases the premium paid by foreign agents to borrow euros in FX markets relative to currencies not covered by these facilities by 51 basis points.\n- Bank equity prices increase by around 1.75% in euro area countries highly exposed via banking linkages to countries whose currencies are targeted by liquidity lines."
    },
    {
      "heading": "Analytical approach and mechanisms (as reported)",
      "content": "- Timeline construction of ECB liquidity line announcements to identify event dates.\n- Empirical analysis of signalling effects on FX premia and spillbacks to euro-area banking-sector equity prices.\n- Use of a stylized model to interpret consistency between observed market responses and theoretical mechanisms linking liquidity-line announcements to reduced FX premia and improved bank equity valuations."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subjects: Asset and liability management, Asset prices, Currencies, Currency markets, Currency swaps, Financial markets, Foreign exchange, Liquidity, Money, Prices\n- Keywords: Asset prices, central bank liquidity line, central bank swap and repo lines, cross-currency liquidity management tool, Currencies, Currency markets, Currency swaps, ECB Euro liquidity line, ECB liquidity line announcement, Global, Liquidity, liquidity facilities, spillbacks."
    },
    {
      "heading": "Publication highlights",
      "content": "- Authors: Silvia Albrizio, Iván Kataryniuk, Luis Molina, Jan Schäfer\n- Date: May 5, 2023\n- Series: Working Paper No. 2023/096\n- Pages: 58\n- ISBN: 9798400240881\n- ISSN: 1018-5941\n\nIMF Working Paper 2023/096 by Silvia Albrizio, Iván Kataryniuk, Luis Molina, and Jan Schäfer.\n\n---\n\n Content in this bundle\n\n- Dataset overview\n  - Dataset overview (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Dataset overview (XLSX){rel=\"external\" type=\"application/vnd.openxmlformats-officedocument.spreadsheetml.sheet\"}\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2023/05/05/ecb-euro-liquidity-lines-532613"
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    "Authors: Silvia Albrizio, Iván Kataryniuk, Luis Molina, Jan Schäfer",
    "Published: May 5, 2023",
    "Series: IMF Working Papers",
    "Central bank liquidity lines have gained momentum since the global financial crisis as a cross-currency liquidity management tool.",
    "The paper provides a complete timeline of the ECB liquidity line announcements and studies their signalling and spillback effects.",
    "Consistent with a stylized model, announcements and market reactions are analyzed to assess effects on FX premia and bank equity prices.",
    "The announcement of an ECB euro liquidity line decreases the premium paid by foreign agents to borrow euros in FX markets relative to currencies not covered by these facilities by 51 basis points.",
    "Bank equity prices increase by around 1.75% in euro area countries highly exposed via banking linkages to countries whose currencies are targeted by liquidity lines.",
    "Timeline construction of ECB liquidity line announcements to identify event dates.",
    "Empirical analysis of signalling effects on FX premia and spillbacks to euro-area banking-sector equity prices.",
    "Use of a stylized model to interpret consistency between observed market responses and theoretical mechanisms linking liquidity-line announcements to reduced FX premia and improved bank equity valuations.",
    "Subjects: Asset and liability management, Asset prices, Currencies, Currency markets, Currency swaps, Financial markets, Foreign exchange, Liquidity, Money, Prices",
    "Keywords: Asset prices, central bank liquidity line, central bank swap and repo lines, cross-currency liquidity management tool, Currencies, Currency markets, Currency swaps, ECB Euro liquidity line, ECB liquidity line announcement, Global, Liquidity, liquidity facilities, spillbacks.",
    "Authors: Silvia Albrizio, Iván Kataryniuk, Luis Molina, Jan Schäfer",
    "Date: May 5, 2023",
    "Series: Working Paper No. 2023/096",
    "Pages: 58",
    "ISBN: 9798400240881",
    "ISSN: 1018-5941",
    "**Dataset overview**",
    "**Working Paper**"
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