IMF's Singh discusses ‘financial plumbing' issues as central banks leave ZLB
Contradictory demands on banks could cause issues as QE is wound in
A new paper from IMF economist Manmohan Singh, published today, 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.
In Financial Plumbing and Monetary Policy, Singh points out that banks will, under proposed regulations, face leverage ratio constraints, boosting demand for high-quality liquid assets at the same time as quantitative easing causes banks to seek balance sheet ‘space' for
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