Unconventional central bank instruments in Hungary
AbstractThe financial crisis revealed that – due to the reliance of the Hungarian banking sector on external funding – the deterioration in the liquidity position can be a significant obstacle to lending in spite of the ample forint liquidity at the system level. The Magyar Nemzeti Bank introduced several unconventional instruments in order to ease the liquidity and financial tensions, to ensure the forint and foreign exchange liquidity of the banking system and to overcome money market turmoil in the crucial FX swap market. Due to banks’ deteriorating lending capacity, the MNB continued to expand these instruments in early 2012. The set of instruments may reduce liquidity constraints, which restrain lending, and provides a safety net against unfavourable liquidity shocks.
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Bibliographic InfoArticle provided by Magyar Nemzeti Bank (the central bank of Hungary) in its journal MNB Bulletin.
Volume (Year): 7 (2012)
Issue (Month): 2 (June)
financial crisis; unconventional central bank instruments; FX swap markets;
Find related papers by JEL classification:
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other
- G01 - Financial Economics - - General - - - Financial Crises
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Judit Páles & Lóránt Varga, 2008. "Trends in the liquidity of Hungarian financial markets – What does the MNB’s new liquidity index show?," MNB Bulletin, Magyar Nemzeti Bank (the central bank of Hungary), vol. 3(1), pages 44-51, April.
- Lóránt Varga, 2010. "Introducing optional reserve ratios in Hungary," MNB Bulletin, Magyar Nemzeti Bank (the central bank of Hungary), vol. 5(3), pages 57-66, October.
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