Войти

Monetary Policy and Excessive Bank Risk Taking (Agur I., Demertzis M.)

Risk-taking and Risk Management Stability&Soundness

Abstract If monetary policy is to aim at financial stability, how would it change? To analyze this question, this paper develops a general-form, axiomatic framework. Financial stability objectives are shown to make a monetary authority more conservative and more aggressive. Conservative as it sets higher rates on average. And aggressive because, in reaction to negative shocks, cuts are deeper but shorter-lived than otherwise. Keeping cuts short is crucial as bank risk responds primarily to stable low rates. Within the short span, cuts then must be deep to achieve standard objectives.
External link Download
Libref/ Agur I., Demertzis M. (2010) “Monetary Policy and Excessive Bank Risk Taking”, European Banking Center Discussion Paper No. 2010–06S, pp. 1-27
© Программирование — Александр Красильников, 2008
    Дизайн — переработанная версия стартовой страницы ГУ–ВШЭ.