Excess Reserves Research Articles

Коэффициенты учета влияния теплотехнических характеристик арматуры на огнестойкость сжатых железобетонных элементов

Предложено модифицировать методику расчета огнестойкости железобетонных конструкций с учетом влияния на показатели их огнестойкости теплотехнических характеристик арматуры. В основу модификации методики положены корректирующие коэффициенты К1 и К2, полученные в результате экспериментальных исследований и численного анализа. Доказано повышение огнестойкости железобетонных элементов при увеличении содержания в них арматуры от 3,5 до 8,0 %. Methods of calculation justification of the bearing capacity of columns, with different percentages of reinforcement, have been developed, tested and fixed in domestic and foreign design standards. The calculation of the fire resistance of columns with small percentages of reinforcement has also been tested and is performed in accordance with the methodology. However, for columns with an increased percentage of reinforcement (more than 3.5 %), the use of the standard technique can lead to excessive reserves and overspending of materials, since when determining the cross-sectional temperature fields for calculating fire resistance, the method does not take into account the thermal influence of reinforcement. Previously conducted by the author experimental studies of cross-section heating temperatures and fire resistance of compressed reinforced concrete elements allowed a comparative analysis of the studied parameters with the results of numerical calculations, the obtained comparable convergence allowed further calculations of reinforced concrete elements in the Abaqus software package with different geometric dimensions and percentage of reinforcement. According to the results of the numerical study, it was determined that when reinforcing reinforced concrete elements up to 3.5%, the influence of thermal characteristics on the strength resistance of reinforced concrete elements under fire is practically absent, but when reinforcing from 3.5 % to 8 %, the greatest influence of thermal characteristics of reinforcement inclusions on the bearing capacity of the elements is manifested. At the same time, it is also recorded that this positive effect disappears when reinforcing elements of more than 8 %, which is due to the significant bearing capacity of reinforcing bars (when compared with concrete), which is 50 percent or more.

ОСОБЕННОСТИ УПРАВЛЕНИЯ КРАТКОСРОЧНЫМИ СТАВКАМИ ДЕНЕЖНОГО РЫНКА В УСЛОВИЯХ УСТОЙЧИВОГО ПРОФИЦИТА ЛИКВИДНОСТИ НА РЫНКЕ МЕЖБАНКОВСКОГО КРЕДИТОВАНИЯ

One of the central bank’s operative objectives is control of short-term interest rates. It means that monetary authority maintains short-term interest rates within a specified corridor and provides their conformity to the policy rate level. Monetary policy tools, which provide liquidity and absorb it from the interbank lending market, insure effective interest rate steering policy. In conventional times central banks implement their monetary policy in case of insignificant deficit of reserve money preserving control over money market interest rates. After the Great Recession central banks of developed countries had to bring tools of unconventional monetary policy in operation, what resulted in unprecedented growth of supply of excess reserves and expansion of central banks’ balance sheets. Basing on experience of Federal Reserve System this article covers the issue of short-term interest rates steering within the scope of significant sustainable structural liquidity surplus on reserve money market.

New challenges of the Georgian energy sector and their legal regulation

The energy sector is of crucial importance in the sustainable economic development process of Georgia and the growth of the population's well-being. Our country is not distinguished by excess reserves of energy resources. However, due to its geopolitical location, we have a significant electricity and gas transit function between Europe and Asia. The global processes of recent years, the Covid-19 pandemic and the Russia-Ukraine war, have put the energy sector in front of new challenges. The issue of highlighting the problems of energy security and efficiency, increasing the energy sector competitiveness, utilizing renewable energy sources, and developing recommendations for the legal regulation improvement of energy markets was on the agenda. The paper highlights the new challenges of the energy sector of Georgia; The possibilities of launching a new organized model of the electricity and natural gas market are analyzed; The results of the current legal reforms in the energy sector are discussed.

Sovereign wealth funds in the post-pandemic era

Sovereign wealth funds (SWFs) have over $11.5 trillion in assets under management as of February 2023. Most of these 176 funds are sponsored by non-Western countries and their growth has made SWFs important international investors, particularly in private equity funding. We first define SWFs, then discuss their evolution into today’s categories of stabilization, savings, and development/strategic funds. We discuss the documented importance of SWF funding sources – oil sales revenues versus excess reserves from export earnings – and summarize the empirical literature studying how SWFs allocate funds geographically and across asset classes. Next, we summarize empirical evidence on the impact of SWF stock investments on target firm financial and operating performance and discuss the evidence showing that the announcement of SWF investment causes target firm stock prices to rise in the short term, but the positive impact is significantly less than the positive return following large stock purchases by private investors, and the longer-term effect of SWF investment on target firms is generally negative. SWFs’ recent focus on promoting ESG policies of investee companies is assessed and briefly compared to the effectiveness of other institutional investors’ ESG efforts.

Cost of foreign reserve accumulation in emerging market and developing economies

PurposeThis paper aims to obtain a recent estimate of the cost of precautionary foreign reserve accumulation that emerging market and developing economies (EMDEs) had to endure to protect themselves against the risks of financial globalization. In addition, the study estimates the cost of excess reserves in emerging market economies (EMEs) using various reserve adequacy indicators that reflect potential sources of foreign exchange drains and vulnerability in EMEs' balance of payments.Design/methodology/approachThis paper begins by explaining the accumulation of foreign reserves in EMDEs as a self-protection strategy against the risks of financial globalization. Next, it sheds light on the different types of economic costs of foreign reserve accumulation. Finally, it estimates the cost of foreign reserve accumulation in EMEs during the period (1990–2018) and in EMDEs during the period (1990–2015) due to data availability.FindingsResults indicate that the cost of accumulating foreign reserves as a self-protection strategy in EMDEs and EMEs' was huge compared to their development financing needs. Applying various reserve adequacy measures demonstrates that many of the EMEs were holding inadequate precautionary reserves in 2018. Actually, this reflects the significant increase in external short term debt that many of the EMEs have witnessed since the eruption of the global financial crisis (2008). Thus increasing reserves in EMEs with weak reserve buffers and higher external debt is critical as they are more vulnerable to external shocks and capital flow reversals. Also given the estimated huge costs of accumulating foreign reserves, EMDEs should accompany it by other complementary self-protection policies and liquidity management policies to free up resources for productive investment.Originality/valueThe study contributes to the literature by estimating the cost of precautionary foreign reserve accumulation imposed on EMDEs during an extended period of time that covers a decade after the onset of the global financial crisis. Also to the authors' knowledge, this is the first study that estimates the cost of excess reserves in EMEs using various reserve adequacy indicators including the International Monetary Fund (IMF) assessing reserve adequacy (ARA) approach.

Excess Reserves and Monetary Policy Tightening

Excess Reserves and Monetary Policy Tightening

Interbank liquidity and short-term yields in an emerging market economy – the experience of Hungary in 2016–2020

Liquidity has an impact on short-term yields, which makes it a key determinant of monetary transmission. The aim of the research was to examine how the increase in the banking system’s liquidity and its distribution within the banking system affects yields. To better understand this relationship, this analysis gives an econometric estimate of the interbank liquidity demand function. The research covers Hungary being a representative of small, open, emerging market economies. The analysis is based on segmented regressions, the study covers the period 2016–2020 regarding overnight interest rates. The slope of the demand function is negative, the coefficients decrease with the increase in excess reserves. The most significant breakpoints of the demand curve are detected around 0.83% and 1.53% of M2 in excess liquidity. There is a correlation between the level of excess reserves and its distribution and concentration. The distribution of liquidity became more balanced along with the increase in excess liquidity. The saturation of the banking system depends on the concentration of liquidity among banks. The results can be useful for other small and open emerging market economies with abundant liquidity, especially in the coming tightening cycle.

Dodd–Frank's impact on community‐bank investment models: A Bayesian structural time series analysis

AbstractWe use Bayesian structural time series (BSTS) methodology to test whether the Wall Street Reform and Consumer Protection Act of 2010 (DF) caused changes in community bank business models. The BSTS methodology uses the pre‐DF period to create synthetic counterfactuals for community‐bank dependent variables of interest. In the post‐DF period, the counterfactuals become predictions of the dependent variables had DF not been enacted. Comparing post‐DF predicted versus actual dependent variables allows us to estimate the causal impact of DF on these variables of interest. We find that relative to assets, community banks significantly reduce their lending activities and significantly increase investment in securities and excess reserves.

International cooperation in foreign reserve policies in the presence of competitive hoarding

AbstractThis article analyzes the international reserve accumulation behavior of emerging and developing economies facing “keeping‐up‐with‐the‐Joneses” externalities. I first document empirical evidence for a significant Joneses effect, which has been particularly persistent in Asia and Latin America since the late 1990s. This peer‐pressure motive could encourage excess reserve hoarding, providing a rationale for cooperation. I then develop a theoretical model of the borrowing economy featuring the Joneses effect and the interdependence between reserves and domestic capital investment. Numerical results show that international cooperation can effectively internalize negative externalities associated with competitive reserve hoarding and induce welfare‐enhancing resource allocations.

Inflation: The problems for aquaculture

Inflation: The problems for aquaculture

The evolution of debtor-creditor relationships within a monetary union: Trade imbalances, excess reserves and economic policy

This paper analyzes the emergence of internal debtor-creditor relationships within a monetary union. We develop a stock-flow consistent model consisting of three regions – North, South, and the Rest of the World (RoW) –, where North and South form a monetary union. We show how the simultaneous presence of investment booms, declining export performance and mercantilist policies within a monetary union can interact in order to create Minsky-type boom-bust cycles. Fiscal policy and a Eurozone lender of last resort can help sustain economic life under existing structural imbalances, but without eliminating the root causes of boom-bust patterns.

Precautionary liquidity shocks, excess reserves and business cycles

This paper identifies a precautionary banking liquidity shock via a set of sign, zero and forecast variance restrictions imposed. The shock proxies the banking sector’s reluctance to lend to the real economy induced by an exogenous preference change for liquid assets. Through the lens of a DSGE model, the precautionary liquidity shock is shown to work through two channels: reserves (balance sheet) and the deposit rate (intertemporal effect). The overall effect is a downward co-movement in output, consumption, investment, and prices, which is amplified the higher are the long-run risks in the economy and banks’ responsiveness to potential risk.

A central bank digital currency in a heterogeneous monetary union: Managing the effects on the bank lending channel

A major obstacle for the implementation of a general-purpose central bank digital currency (CBDC) is the risk of bank disintermediation, potentially jeopardizing financial stability and the bank lending channel of monetary transmission. By adapting the theoretical framework of Dutkowsky and VanHoose (2018b, 2020) to the euro area, this study investigates and clarifies the conditions under which a digital euro could be introduced on a large scale without leading to bank disintermediation or a credit crunch. First, the central bank would require proper mechanisms to manage the volume and the user cost of CBDC in circulation. Second, the central bank should continue to facilitate access to its long-term lending facilities, to provide banks with a funding source alternative to client deposits at an equivalent cost. Depending on its design, a digital euro could improve bank profitability and competitiveness by absorbing large amounts of idle (and expensive) excess reserves without penalizing lending, while incentivizing bank digitalization.

How liquidity is driving inflation and asset prices

▪ Over the last two decades China's role as the lead provider of global liquidity has diminished, while the US has stepped up to fill most of the gap. This will matter when quantitative tightening begins in earnest – advanced economies' monetary retrenchment will have more significance for global financial markets. ▪ But we think changes in the effectiveness of monetary policy, plus the mix of monetary and fiscal policy, should dampen some of the shock. ▪ On one side, the money multiplier (a ratio of broader money to the monetary base) has fallen in the US and eurozone since 2020, when the monetary expansion started, as banks have parked money in excess reserves. So the effects of quantitative tightening will likely be proportionately milder than those seen in 2018. ▪ On the other side, fiscal policy has changed substantially during the pandemic crisis – a decided turn towards fiscal exuberance, coupled with a different structure to budget spending. Whereas post‐GFC discretionary fiscal spending was largely aimed at support for the ailing financial sector, post‐pandemic spending has been directed towards social transfers and discretionary spending aimed at supporting household budgets. We've found a noticeable correlation between budget transfers and inflation in the post‐pandemic period. ▪ A combination of higher liquidity with a lower money multiplier should then mean the costs of quantitative tightening are relatively lower in terms of real activity and financial market performance. As for inflation, it's more likely to be restrained by the retrenchment from the fiscal expansion that played a (possibly decisive) role in unleashing it in the first place.

ОСОБЕННОСТИ УПРАВЛЕНИЯ ПРОЦЕНТНЫМИ СТАВКАМИ ДЕНЕЖНОГО РЫНКА БАНКОМ АНГЛИИ

After world financial crisis of 2008 central banks of developed countries started to implement unconventional monetary policy because of the zero lower bound problem. Such policy actions have led to expansion of balance sheets of these central banks arising from unprecedented growth of excess reserves’ supply. This article covers the issue of controlling short-term money market interest rates by Bank of England in case of sustainable liquidity surplus. It is underlined that paying interest on excess and required reserves contributes to reduction of distortions in commercial banks’ operation activities and elimination of reserve money opportunity cost, which impedes monetary authority in controlling short-term interest rates of interbank lending market.

Two-Tier System for Remunerating Excess Reserve Holdings

Two-Tier System for Remunerating Excess Reserve Holdings

The Relationship Between Asset Purchases, Monetary Aggregates, and Inflation Between 2007 and 2022 – an Example of the Federal Reserve

The large asset purchase programs following the 2008 crisis led to a significant expansion of money aggregates, which led to an appreciation of the relationship between inflation and money supply. In this study, I analysed the changes in monetary aggregates caused by quantitative easing, the framework for the implementation of monetary policy with ample reserves and their impact on price levels using a vector autoregressive (VAR) model between 2007 and 2022 based on data for the United States. The study includes the pandemic after 2020, however, due to the limited length of time available and the uncertainty of the effects, the focus of the study is on pre-pandemic processes. Inflation fears caused by the significant expansion of the money supply during the period were not substantiated due to the increase of excess reserves, the changing monetary policy operational framework and negative output gap. According to the model monetary aggregate shocks are built into inflation expectations, changes in the money aggregates caused by asset purchases help the central bank to reach its medium-term inflation target.

Seismic sequence stratigraphy of the Permo- Triassic Karoo Group and its implication for hydrocarbon exploration, southwestern Ogaden Basin, Ethiopia

The Ogaden Basin is the largest sedimentary basin in Ethiopia and one of the underexplored basins in eastern Africa. It has an area of approximately 350,000 sq. km and an estimated sediment thickness in excess of 7 km in the deepest part. The Karoo sequence which lies at the base of the sedimentary section is a Permian to Triassic age terrigenous clastics deposited in tensional to trans-tensional tectonic setting. The sequence has an estimated total thickness of 3000 m and contains proven gas reserve in excess of 6 TCF. Previous studies focused primarily on the sedimentology and lithostratigraphy of the section. This work provides the first integrated sequence stratigraphic analysis of the Karoo section based on seismic reflection and well data. In this study, the Karoo super-sequence is divided into four second-order sequences and at least four higher order sequences in the uppermost sequence. The transgressive systems tract and the overlying highstand systems tract separated by a maximum flooding surface constitute the bulk of these sequences. The dominant depositional systems in systems tracts are shallow to deep lacustrine, fluvio-deltaic and possibly sublacustrine fans and turbidites. Our study suggests that the major control in creation of accommodation space is related to wrench tectonics which gave rise to narrow pull apart sub-basins and their surrounding steep flanks. These structures are oriented NE-SW to E-W. Organic rich lacustrine shales commonly associated with transgressive systems tract and prodelta to lacustrine shales of highstand systems tract, charging deltaic and fluvial sand reservoirs of the highstand systems tract as well as potential targets such as turbidites, and sealed by transgressive surfaces make up potential hydrocarbon plays of the Karoo section. This study is one of the first detailed analysis of the Karoo sequence using sequence stratigraphic approach to predict an enhanced hydrocarbon potential in the Ogaden Basin.

A tiering rule to balance the impact of negative policy rates on banks

Negative interest rate policy makes excess liquidity costly to hold for banks and this may weaken the bank-based transmission of monetary policy. We design a rule-based tiering system for excess reserve remuneration that reduces the burden of negative rates on banks while ensuring that the central bank keeps control of interbank interest rates. Using euro-area data, we show that under the proposed tiering system, the aggregate cost of holding excess liquidity when the COVID-19 monetary stimulus fully unfolds would be more than 36% lower than that under the ECB’s current system.

Problems and Risks of Renewable Energy Sources

The article analyzes the problems and risks of new-fangled renewable energy sources in the 21st century, which can radically change the energy picture of the world and to a certain extent reduce the risk of climate change. However, energy generation from wind is usually available 25—35% of the time, from the sun — 10—25%.Renewable energy sources (RES) face the problem of accumulating or supporting capacities that should replace the unstable generation of RES at the time of inevitable failures. RES cannot exist without excess reserve capacities on traditional energy carriers that can quickly increase and reduce electricity production. Abandoning hydrocarbons in the next 30—50 years looks unrealistic if countries want to maintain their competitiveness. The growth of the share of RES in the global energy balance is an extremely politicized phenomenon.The development of renewable generation creates risks for consumers. Especially for large ones. One of these risks is associated with the intermittent, unstable nature of renewable generation, which in recent years has been understood mainly as solar and wind power plants. In addition, to produce more solar panels, wind turbines and batteries for electric vehicles, humanity will need more specific resources — rare earth metals. The production of these metals is unsafe for the environment. It involves the consumption of a huge amount of water and electrical energy.Renewable energy sources may dominate, but it will take centuries. Demand is already growing, but fossil fuels will live long enough.