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LIQUIDITY MANAGEMENT IN TIMES OF CRISIS IN THE EURO AREA LUCIA KOZMOVA
ABSTRACT To understand the implementation of monetary policy during standard conditions is very interesting, but watch the steps of the central banks in times of crisis is even more interesting. We see a situation where monetary policy is no longer effective in stimulating the economy, whether by trying to decrease the interest rate, or increase the money supply. The solution is therefore the introduction of non-standard or unconventional steps, whose main objective is to escape the ongoing recession and once again restore balance and stability to financial markets. The aim of my work is to focus on liquidity management in the euro area, while trying to analyze what are the effects of releasing of liquidity, whether in the form LTROs, MRO, or in the form of swap operations in the financial market. For further development, it is necessary for monetary policy to maintain price stability in the euro area as a whole. This will ensure a firm anchoring of inflation expectations in line with the Governing Council’s aim to keep inflation in the medium term at a level below but close to 2%. Such anchoring is a prerequisite for monetary policy to support economic growth and job creation in the euro area. KEY WORDS: ECB, monetary policy, liquidity management. NB: “This work was supported by the project VEGA 1/0613/12 “The intensity of the relationship between financial sector and real economy as a source of economic growth in Slovakia in the post-crisis period” (50 %) and the project of PMVP 2315026 “Theoretical and practical aspects of modeling foreign debt and economic imbalance in DSGE models.” DETAILS ABOUT AUTHOR: LUCIA KOZMOVA DOCTORAL STUDENT DEPARTMENT OF BANKING AND INTERNATIONAL FINANCE UNIVERSITY OF ECONOMICS IN BRATISLAVA BRATISLAVA, SLOVAKIA lucia.kozmova@euba.sk
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