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Prof. Kjell Nyborg, SFI@UZH, investigates the quality of the assets central banks accept as collateral

Posted by
Anita Belitz Krasniqi
on
Tuesday, May 3, 2016 - 17:15

In a recent article in the University of Zurich's magazine, SFI Prof. Kjell Nyborg is interviewed about his current research on how central banks provide liquidity (money) to banks and the wide range of assets central banks accept as collateral in return for liquidity. Focusing especially on the euro area, Nyborg’s work de-mystifies how this important process works and how it is used to manage the economy and influence financial markets.

Nyborg's research concludes that there has been a startling decline in the quality of the collateral accepted by central banks, in particular the European Central Bank, that could affect the real economy.

Read the full article here.

Nyborg's research on the subject has grown to such an extent that what was initially planned as a paper has grown into a book "Collateral Frameworks : The Open Secret of Central Banks". Some of the findings are already available in the working paper "Central bank collateral frameworks" available here. The book is planned for publishing by Cambridge University Press later this year.