Paper models impact of ECB’s collateral policy
European Central Bank’s collateral policy helped smooth monetary policy transmission, paper argues
A working paper published by the European Central Bank (ECB) presents a model of how European banks' collateral choices are affected by ECB policy.
In The collateral channel of open market operations, Nuno Cassola and François Koulischer use country-level data on assets pledged to the ECB from 2009 to 2011. Their model, the authors say, permits researchers to "to quantify the role of collateral requirements in the implementation of monetary policy".
The authors argue that the results suggest
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