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Issuing central bank securities

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  • Garreth Rule

Abstract

Many central banks around the world are faced with the challenge of implementing their policy goals in the presence of surplus liquidity in domestic banking systems. Surplus liquidity can impair the central bank's ability to control its operational target and impact on its profitability, potentially affecting its ability to operate in an independent manner. Within the range of instruments available, the issuance of central bank securities is one policy option that has been used effectively by a number of central banks. In this handbook we look at the characteristics of central bank securities and how the fit into the broader monetary operations framework of a central bank. We then look at alternative instruments available to a central bank, before considering the advantages and disadvantages of these different options. It concludes by considering means of co-ordinating central bank securities with the issuance of central government securities and briefly looks at methods of auction employed to issue such securities.

Suggested Citation

  • Garreth Rule, 2011. "Issuing central bank securities," Handbooks, Centre for Central Banking Studies, Bank of England, number 30, April.
    • Handle: RePEc:ccb:hbooks:30
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Fabio Canetg & Daniel Kaufmann, 2019. "Shocking Interest Rate Floors," IRENE Working Papers 19-02, IRENE Institute of Economic Research.
    2. Adigozalov, Shaig & Huseynov, Salman, 2015. "İnflyasiya hədəflənməsinin əməliyyat çərçivəsi: ölkə təcrübələri AMB üçün nə vəd edir? [Operational framework of Inflation Targeting: what promises do country experiences make to the CBAR?]," MPRA Paper 76349, University Library of Munich, Germany.
    3. Arne Hansen & Dirk Meyer, 2021. "EZB-Schuldverschreibungen — neue Verwendung für ein altes Instrument? [ECB Debt Certificates — New Use for an Old Instrument?]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 101(9), pages 732-739, September.
    4. Garreth Rule, 2012. "Collateral management in central bank policy operations," Handbooks, Centre for Central Banking Studies, Bank of England, number 31, April.
    5. Elosegui, Pedro & Forte, Federico D. & Montes-Rojas, Gabriel, 2022. "Network structure and fragmentation of the Argentinean interbank markets," Latin American Journal of Central Banking (previously Monetaria), Elsevier, vol. 3(3).
    6. Mr. Simon T Gray & Ms. Runchana Pongsaparn, 2015. "Issuance of Central Bank Securities: International Experiences and Guidelines," IMF Working Papers 2015/106, International Monetary Fund.
    7. Jorge Carrera & Gaspar Maciel & Esteban Rodríguez, 2020. "La flexibilidad de un instrumento de política monetaria: El caso de las LEBAC en Argentina," Asociación Argentina de Economía Política: Working Papers 4325, Asociación Argentina de Economía Política.
    8. George Pantelopoulos, 2021. "Exogenous and endogenous sterilisation under managed exchange rates," Review of International Economics, Wiley Blackwell, vol. 29(4), pages 756-779, September.
    9. Canetg, Fabio & Kaufmann, Daniel, 2022. "Overnight rate and signalling effects of central bank bills," European Economic Review, Elsevier, vol. 143(C).

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    More about this item

    Keywords

    Issuing central bank securities;

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects

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