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Title: The ECB Collateral Policy Beyond Conventional Monetary Stimulus: In depth analysis
Authors: Macchiarelli, C
Monti, M
Keywords: economic policy;euro area;European Central Bank;market economy;monetary policy
Issue Date: 2-Jul-2018
Publisher: European Union
Series/Report no.: European Union. Directorate-General for Internal Policies of the Union. Policy Department A. Economic and Scientific Policy;IP/A/ECON/2018-02
European Parliament. Committee on Economic and Monetary Affairs;PE 619.017
Abstract: The importance of collateral as an instrument for monetary policy has increased in recent years not only in the light of the changes in the ECB’s collateral framework during the crisis but also due to the progressive replacement of the unsecured money market segment with the secured one in the euro area. Both aspects are set to have consequences for collateral availability and the scarcity of high-quality assets, particularly as these interact with non-standard monetary policy. In this note, we look for evidence of the ECB’s Expanded Asset Purchase Programme (EAPP) effects through the quantity and quality of collateral, based on the Eurosystem Collateral Data, as well as a review of the literature. We conclude that collateral is vital to the well-functioning of money markets, and the availability in principle of monetary policy beyond conventional remains an important tool to deal with the issue of potential shortages of high-quality collateral, at least in the short-term.
Description: This document was provided by Policy Department A at the request of the Economic and Monetary Affairs Committee.
Gov't Doc #: PE 619.017
URI: 978-92-846-3170-4
ISBN: 978-92-846-3169-8
Appears in Collections:Dept of Economics and Finance Research Papers

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