Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5078360 | International Journal of Industrial Organization | 2010 | 14 Pages |
Abstract
Among the most puzzling observations on the euro money market are the discount in the weekly refinancing operations, the more aggressive bidding under uncertainty, the temporary flatness of bid schedules, and the development of interest rate spreads. To explain these observations, we consider a standard divisible-good auction with either uniform or discriminatory pricing, and place it in the context of a secondary market for interbank credit. The analysis links the empirical evidence to the endogenous choice of collateral in credit transactions. We also discuss the Eurosystem's preference for the discriminatory auction, the remuneration of reserves, and the impact of the recent market turmoil.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Christian Ewerhart, Nuno Cassola, Natacha Valla,