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Central Bank’s Role in Ensuring Financial Stability and An Efficient Pass-Through of Monetary Policy Measures

Author

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  • Gabriela LATEA

    (The Romanian Academy, “Costin C. Kirițescu†Economic Research National Institute, Bucharest, Romania)

Abstract

After the emergence of effects from the major financial crisis of 2007-2008, central banks have become centrepieces in ensuring financial stability. The National Bank of Romania plays an intrinsic role in safeguarding financial stability from a dual perspective, i.e. the monetary authority and the prudential authority. In order to examine the efficiency of the pass-through of the effects of changes in the policy rate to the economic agents, we have analysed the existing mechanisms, starting from the interest rates traded on the interbank market and short-term rates on certain banking products targeting households and non-financial corporations. The results confirm the presence of connections, providing quantitative insight on the functioning of these mechanisms.

Suggested Citation

  • Gabriela LATEA, 2018. "Central Bank’s Role in Ensuring Financial Stability and An Efficient Pass-Through of Monetary Policy Measures," Finante - provocarile viitorului (Finance - Challenges of the Future), University of Craiova, Faculty of Economics and Business Administration, vol. 1(20), pages 156-167, November.
    • Handle: RePEc:aio:fpvfcf:v:1:y:2018:i:20:p:156-167
    as

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    References listed on IDEAS

    as
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    5. Allen, William A. & Wood, Geoffrey, 2006. "Defining and achieving financial stability," Journal of Financial Stability, Elsevier, vol. 2(2), pages 152-172, June.
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    More about this item

    Keywords

    financial stability; monetary policy; interbank market; policy rate.;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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