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The European Central Bank’s OMT Programme

Author

Listed:
  • Nikolay Hristov
  • Oliver Hülsewig
  • Thomas Siemsen
  • Timo Wollmershäuser

Abstract

The European Central Bank (ECB) officially justifies its “Outright-Monetary-Transactions” programme (OMT programme) by citing disruptions to monetary policy, shown by the fact that interest rates for companies in the crisis countries of the Eurozone have hardly dropped despite the massive drop in central bank interest rates. The goal of the OMT programme is to reduce the yields on government bonds in secondary markets in order to reduce interest rates on loans. This article suggests that the OMT programme is not the right tool for achieving the stated goal of restoring monetary policy transmission.

Suggested Citation

  • Nikolay Hristov & Oliver Hülsewig & Thomas Siemsen & Timo Wollmershäuser, 2014. "The European Central Bank’s OMT Programme," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 67(04), pages 15-16, February.
    • Handle: RePEc:ces:ifosdt:v:67:y:2014:i:04:p:15-16
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    File URL: https://www.ifo.de/DocDL/ifosd_2014_04_2.pdf
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    References listed on IDEAS

    as
    1. Wollmershäuser, Timo & Hristov, Nikolay & Hülsewig, Oliver & Siemsen, Thomas, 2014. "Smells Like Fiscal Policy? Assessing the Potential Effectiveness of the ECB s OMT Program," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100280, Verein für Socialpolitik / German Economic Association.
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    More about this item

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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