How central banks can take nominal rates deeply negative

The popular view that nominal interest rates have a natural zero lower bound has become obsolete in modern financial systems. It may be more...

Quantitative easing and the collateral problem

Another (IMF) paper of Manmohan Singh deals with the influence of non-conventional monetary policy on collateralized borrowing. In past years, quantitative easing (QE) has absorbed collateral...

An updated guide to ECB non-conventional monetary policy

The ECB now runs one of the most complex monetary policy regimes. Beyond regular liquidity supply, its operating framework features long-term full-allotment refinancing operations, generous collateral acceptance,...

The impact of non-conventional monetary policy on banks

Non-conventional monetary policy seems to benefit banks' balance sheets. After all, it offers cheap refinancing and credit market support. However, an empirical analysis by...

The evolution of China’s monetary policy

China’s economy has long relied on compressed interest rates in conjunction with strict capital controls and a tightly managed exchange rate. A new ADBI...

“Helicopter money”: A practical guide for markets

If current non-conventional monetary policies fail to contain deflation risk, some form of debt monetization or “helicopter money” will become a policy option. The...

The Federal Reserve’s strategy after tapering

William Dudley provided an update of the Fed’s strategy for normalizing monetary policy. Under appropriate economic conditions, policy rates could begin rising in 2015,...

ECB asset purchases: key points to memorize

The ECB 2015/16 asset purchase program will include sovereign and quasi sovereign debt, ABS, and covered bonds. The envisaged annualized pace of balance sheet...

The dangerous slide in global real interest rates

Various research contributions suggest that the global decline in real interest rates may be self-reinforcing. That is because low real rates spur leverage, debt,...

Underestimated effects of the termination of QE and forward guidance

It is evident that non-conventional Fed policy has contributed to long-term yield compression. It is less evident how this exactly worked and what will...

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Identifying the drivers of the commodity market

Commodity futures returns are correlated across many different raw materials and products. Research has identified various types of factors behind this commonality: macroeconomic...

Macro factors of the risk-parity trade

Risk-parity positioning in equity and (fixed income) duration has been a popular and successful investment strategy in past decades. However, part of that success...

Identifying market regimes via asset class correlations

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