Lamersdorf, Nora; Linzert, Tobias; Monnet, Cyril (2023). CBDC, Monetary Policy Implementation, and The Interbank Market
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We analyze the impact of banks intermediating CBDC on the interbank market. When banks increase their CBDC accounts by $1 they need $1 of reserves. Increasing CBDC usage drains reserves and may increase the interbank rate. The effect of CBDC remuneration is unclear: It makes CBDC a more attractive means to pay, thus reducing funding costs (reducing the drain in reserves) and encouraging investment (increasing the drain in reserves). A cap on CBDC holdings reduces interbank and commercial deposit rates, as banks require fewer deposits to buy reserves. Tiered remuneration does not provide additional benefits over a single (lower) rate.
Item Type: |
Working Paper |
|---|---|
Division/Institute: |
03 Faculty of Business, Economics and Social Sciences > Department of Economics |
UniBE Contributor: |
Monnet, Cyril |
Subjects: |
300 Social sciences, sociology & anthropology > 330 Economics |
Language: |
English |
Submitter: |
Julia Alexandra Schlosser |
Date Deposited: |
23 Oct 2023 12:24 |
Last Modified: |
23 Oct 2023 12:24 |
BORIS DOI: |
10.48350/187381 |
URI: |
https://boris.unibe.ch/id/eprint/187381 |
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