Availability of High-Quality Liquid Assets and Monetary Policy Operations: An Analysis for the Euro Area

37 Pages Posted: 5 Feb 2019

See all articles by Roel Grandia

Roel Grandia

European Central Bank (ECB)

Petra Hänling

Deutsche Bundesbank

Michelina Lo Russo

Independent

Pontus Åberg

European Central Bank (ECB)

Date Written: February 1, 2019

Abstract

This paper provides an overview of supply and demand factors influencing the availability of euro-denominated debt instruments that qualify as high-quality liquid assets (HQLA) in the euro area. The paper estimates the supply of HQLA issued by the public and private sectors as well as the aggregated impact of Eurosystem monetary policy operations on the amount and composition of HQLA held by banks and other economic agents. An assessment of the main demand factors is also presented. Finally, the paper provides some insights into the interaction with and implications for the Eurosystem monetary policy implementation framework in the longer run.

Keywords: regulatory changes, central bank policies, bank regulation, credit operations, asset purchase programme

JEL Classification: D41, E58, G1, G28

Suggested Citation

Grandia, Roel and Hänling, Petra and Lo Russo, Michelina and Åberg, Pontus, Availability of High-Quality Liquid Assets and Monetary Policy Operations: An Analysis for the Euro Area (February 1, 2019). ECB Occasional Paper No. 218 (2019); ISBN 978-92-899-3679-8, Available at SSRN: https://ssrn.com/abstract=3328390 or http://dx.doi.org/10.2139/ssrn.3328390

Roel Grandia (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Petra Hänling

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

Michelina Lo Russo

Independent ( email )

Pontus Åberg

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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