The ECB and the Interbank Market

32 Pages Posted: 4 Dec 2012

See all articles by Domenico Giannone

Domenico Giannone

International Monetary Fund (IMF); Centre for Economic Policy Research (CEPR)

Michele Lenza

European Central Bank (ECB)

Huw Pill

Goldman Sachs, Australia

Lucrezia Reichlin

London Business School; Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES); Centre for Economic Policy Research (CEPR); European Central Bank (ECB)

Multiple version iconThere are 2 versions of this paper

Date Written: November 20, 2012

Abstract

We analyse the impact on the euro area economy of the ECB’s non-standard monetary policy measures by studying the effect of the expansion of intermediation of interbank transactions across the central bank balance sheet. We exploit data drawn from the aggregated Monetary and Financial Institutions (MFI) balance sheet, which allows us to construct a measure of the ‘policy shock’ represented by the ECB’s increasing role as a financial intermediary. We find small but significant effects both on loans and real economic activity.

Keywords: non-standard monetary policy measures, interbank market

JEL Classification: E5, E58

Suggested Citation

Giannone, Domenico and Lenza, Michele and Pill, Huw and Reichlin, Lucrezia, The ECB and the Interbank Market (November 20, 2012). ECB Working Paper No. 1496, Available at SSRN: https://ssrn.com/abstract=2178378 or http://dx.doi.org/10.2139/ssrn.2178378

Domenico Giannone (Contact Author)

International Monetary Fund (IMF) ( email )

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Centre for Economic Policy Research (CEPR)

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Michele Lenza

European Central Bank (ECB) ( email )

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Germany

Huw Pill

Goldman Sachs, Australia ( email )

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Sydney, NSW 2000
Australia

Lucrezia Reichlin

London Business School ( email )

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United Kingdom

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

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Centre for Economic Policy Research (CEPR)

London
United Kingdom

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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