Netherlands Bank paper: Basel III could disrupt monetary transmission
New capital and liquidity rules proposed under Basel III could lead to a steeper interest rate curve, and interfere with the central bank's monetary policy operations, the Netherlands Bank has said.
The Netherlands Bank said in its latest Quarterly Bulletin, released on Wednesday, that because Basel III promotes the lengthening of banking funding, it was "possible activity in the short-end of the money market could diminish." The central bank added: "This could lead to a steeper interest curve
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