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A critique of the ECB's liquidity policies | 66 comments (66 topical, editorial, 0 hidden)
Re: The EONIA heartbeat (4.00 / 2)
Pretty clear. The deposit-MLF band was brought down swiftly in early 2009 to its current level which started in May, 2009. EONIA was stabilised (with moderate spikes on the cusp of one maintenance period to the next). Then, soon after the beginning of bond purchases, EONIA becomes much more volatile, trending upwards.

The sign there is something else at work since mid-2010 is that the deposit-MLF band has not changed. "Something else" could be sterilisation, or possibly aliens learning to use a Wii.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Feb 24th, 2011 at 04:25:58 PM EST
[ Parent ]
Aliens with Wiis (none / 0)
or frickin' sharks with frickin' laser beams attached to their frickin' heads.

Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it - Paul Krugman
by Carrie (migeru at eurotrib dot com) on Thu Feb 24th, 2011 at 05:06:58 PM EST
[ Parent ]
Re: The EONIA heartbeat (none / 0)
One can see that it might make sense to raise interest rates.

For instance, raise the deposit rate by 0.50% to 0.75%, raise the refinacing rate by 0.25% to 1.25%, and leave the marginal rate unchanged at 1.75%.

Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it - Paul Krugman

by Carrie (migeru at eurotrib dot com) on Thu Feb 24th, 2011 at 05:16:03 PM EST
[ Parent ]

A critique of the ECB's liquidity policies | 66 comments (66 topical, 0 editorial, 0 hidden)
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