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Questions tagged [central-banking]

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2answers
60 views

Why is there a need for Libor in the UK

In the US, the Fed determines the federal funds rate, which is used by banks to lend money to each other. In the UK, I am assuming the Central Bank has the same role. So why then is there a need for ...
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2answers
62 views

Does the FED lend directly to commercial&investment banks or is there an intermediary

I has looking at this video on how interest rates are set. When the process of borrowing from the FED to commercial banks is explained, another entity is described(around 00:40). So when the FED ...
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4answers
114 views

Why wouldn't quantitative easing work if interest rates approach 0

I was reading this article on quantitative easing. At some point, this is mentioned, referring to QE: This strategy loses effectiveness when interest rates approach zero, at which point banks have to ...
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3answers
437 views

How can quantitative easing lower interest rates

I was reading about quantitative easing here, where the definition goes like this: Quantitative easing is an unconventional monetary policy in which a central bank purchases government securities or ...
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1answer
112 views

What is a central bank's shadow rate

I was reading a WSJ article about the European Central Bank shadow rate, which is -5.1% at the moment. The article says about the shadow rate that "Calculated with the rates on longer-dated credit ...
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2answers
5k views

A libor curve VS A 3-month or 6-month libor curve

I'm very confused about the terms regarding libor curves in general. When people talk about libor curve, I picture it as a curve with different libor maturities (i.e. 1 week, 1 month, 3-month and 6-...
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1answer
112 views

Why can't/doesn't the Fed adjust the federal funds interest rate continuously?

Maybe the question I'm asking doesn't make sense-- but this is something I've wondered about since I learned about the Fed in high school. The media typically talks about Fed interest rate changes as ...
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2answers
120 views

Trading a planned drop of FX peg

I've been playing around with ideas (not primarily to make money) about what exactly is going to happen when Czech National Bank will leave the EUR\CZK peg? It's been on for roughly 2.5 yrs as a ...