IDEAS home Printed from https://ideas.repec.org/a/mnb/bullet/v7y2012i1p14-23.html
   My bibliography  Save this article

Unconventional central bank instruments in Hungary

Author

Listed:
  • Gergely Fábián

    () (Magyar Nemzeti Bank (central bank of Hungary))

  • Róbert Mátrai

    () (Magyar Nemzeti Bank (central bank of Hungary))

Abstract

The 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.

Suggested Citation

  • Gergely Fábián & Róbert Mátrai, 2012. "Unconventional central bank instruments in Hungary," MNB Bulletin (discontinued), Magyar Nemzeti Bank (Central Bank of Hungary), vol. 7(2), pages 14-23, June.
  • Handle: RePEc:mnb:bullet:v:7:y:2012:i:1:p:14-23
    as

    Download full text from publisher

    File URL: http://www.mnb.hu/letoltes/fabian-matrai.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Judit Páles & Lóránt Varga, 2008. "Trends in the liquidity of Hungarian financial markets – What does the MNB’s new liquidity index show?," MNB Bulletin (discontinued), Magyar Nemzeti Bank (Central Bank of Hungary), vol. 3(1), pages 44-51, April.
    2. Lóránt Varga, 2010. "Introducing optional reserve ratios in Hungary," MNB Bulletin (discontinued), Magyar Nemzeti Bank (Central Bank of Hungary), vol. 5(3), pages 57-66, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    financial crisis; unconventional central bank instruments; FX swap markets;

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mnb:bullet:v:7:y:2012:i:1:p:14-23. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maja Bajcsy). General contact details of provider: http://edirc.repec.org/data/mnbgvhu.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.