https://macropaperwarehouse.com/authors/ciaran-rogers/Ciaran RogersHugo -- gohugo.ioen-ushttps://macropaperwarehouse.com/papers/money-markets-collateral-and-monetary-policy/https://macropaperwarehouse.com/papers/money-markets-collateral-and-monetary-policy/<p>The paper studies the euro area interbank money markets during the global financial crisis (2007–09) and sovereign debt crisis (2010–15), documenting four empirical regularities and building a quantitative general equilibrium model to evaluate their macroeconomic impact and the role of central bank policy. The central finding is that the ECB&rsquo;s collateral policy — lending to banks at haircuts more favorable than private markets — prevented output and investment from falling roughly <strong>twice as much</strong> as they would have under a passive constant-balance-sheet policy.</p>