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The Safe Asset Controversy: Policy Implications after the Crisis

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  • Christoph Große Steffen

Abstract

Safe assets are the lubricant of the financial system. They serve as a store of value, to meet regulatory requirements, and as a pricing benchmark. Some researchers identify a severe and chronic global safe asset shortage; others disagree, while empirical evidence remains ambiguous. In the post-Lehman world, the availability of safe assets entails new policy challenges. While still a potential source for global imbalances, the debate today stretches further to implications for financial stability and economic policy effectiveness.

Suggested Citation

  • Christoph Große Steffen, 2014. "The Safe Asset Controversy: Policy Implications after the Crisis," DIW Roundup: Politik im Fokus 3, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwrup:3en
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.434490.de/DIW_Roundup_3_en.pdf
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    1. repec:cbh:journl:v:14:y:2015:i:1:p:111-138 is not listed on IDEAS
    2. Dániel Horváth & Róbert Szini, 2015. "The safety trap – the financial market and macroeconomic consequences of the scarcity of safe assets," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 14(1), pages 111-138.

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