Understanding the cost difference between intraday and overnight liquidity

dc.contributor.author Bhattacharya, Joydeep
dc.contributor.author Haslag, Joseph
dc.contributor.author Bhattacharya, Joydeep
dc.contributor.author Martin, Antoine
dc.contributor.department Economics
dc.date 2021-08-11T17:50:46.000
dc.date.accessioned 2021-08-14T04:32:37Z
dc.date.available 2021-08-14T04:32:37Z
dc.date.issued 2008-11-01
dc.description.abstract <p>In most countries, the cost of reserves intraday is very close to zero. Many central banks, including the European Central Bank (ECB), the Bank of England, or the Swiss National Bank allow collateralized intraday borrowing at no cost. In the U.S., banks are allowed to incur uncollateralized daylight overdrafts for which they incur a small fee2. In contrast, most countries rely on a positive marginal cost of overnight reserves for the implementation of their monetary policies. In the Euro Area, the cost is at least as large as the difference between the policy rate and the rate the ECB pays on reserves deposited by banks, which is 100 basis points. In the U.S., the cost corresponds to the Fed funds target, since the Fed does not pay interest on reserves.</p>
dc.description.comments <p>This article is published as J. Bhattacharya, A. Martin and J. Haslag. Understanding the cost difference between intraday and overnight liquidity, <em>Journal of Financial Transformation</em>, 24, 105-107, 2008. </p>
dc.format.mimetype application/pdf
dc.identifier archive/lib.dr.iastate.edu/econ_las_pubs/821/
dc.identifier.articleid 1825
dc.identifier.contextkey 24276488
dc.identifier.s3bucket isulib-bepress-aws-west
dc.identifier.submissionpath econ_las_pubs/821
dc.identifier.uri https://dr.lib.iastate.edu/handle/20.500.12876/5w5pyDQz
dc.language.iso en
dc.source.bitstream archive/lib.dr.iastate.edu/econ_las_pubs/821/2008_Bhattacharya_UnderstandingCost.pdf|||Sat Jan 15 02:08:23 UTC 2022
dc.subject.disciplines Economic Theory
dc.subject.disciplines Finance
dc.title Understanding the cost difference between intraday and overnight liquidity
dc.type article
dc.type.genre article
dspace.entity.type Publication
relation.isAuthorOfPublication 56f37f39-ec2a-4b0b-b491-e32fba8e2c73
relation.isOrgUnitOfPublication 4c5aa914-a84a-4951-ab5f-3f60f4b65b3d
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