collateral

Expectations of future shortages in quality liquid bonds in US debt markets continue to persist. These shortages however are likely to be more acute for short-term paper. As a percentage of total government debt for example, treasury bills…

The ‘shadow banking’ sector is a loose title given to the financial sector that exists outside the regulatory perimeter but mimics some structures and functions of banks. This column introduces a new CEPR Policy Insight that looks into what…

QE is still on, but central banks are pondering exit pathways. Exit requires vacuuming up excess reserves, winding down massive securities holdings, and restoring normal interest rates – all without killing the recovery. This column points…

ECB President Draghi suggested last week that the central bank was taking a fresh look at the deposit rate. There does not appear to be any economist that thinks it is a good idea. The reasons vary, but the two main reasons are that it…

In this first post of a series of 3-5 posts, I try to present the building blocks of the argument as I see them and answer the question of why the traditional view on the liquidity trap does not apply in the current situation.

There are several developments that warn of future problems in the euro zone and these make us suspicious about the euro's ability to sustain the upside break.

Banks can borrow as much as they want from the central for three years at the refi rate. They are limited only by their desire and collateral. The ECB also liberalized further its definition of acceptable collateral. But expectations of…

Frederick Sheehan argues that we are overleveraged, undercollateralized, and accentuating these unsustainable imbalances through economic policy to smooth out volatility.