The daily market for funds in Europe: What has changed with the EMU?

Gabriel Pérez Quirós, Hugo Rodríguez Mendizábal

Research output: Contribution to journalArticleResearchpeer-review

41 Citations (Scopus)


This paper shows that the existence of deposit and lending facilities combined with an averaging provision for the reserve requirement are powerful tools to stabilize the overnight rate. We reach this conclusion by comparing the behavior of this rate in Germany before and after the start of the EMU. The analysis of the German experience allows us to isolate the effects on the overnight rate of these particular instruments of monetary policy. To illustrate that this outcome is a general conclusion and not a particular result of the German market, we develop a theoretical model of reserve management, which is able to reproduce our empirical findings. Copyright 2006 by The Ohio State University.
Original languageEnglish
Pages (from-to)91-118
JournalJournal of money, credit and banking
Issue number1
Publication statusPublished - 1 Feb 2006


  • Martingale hypothesis
  • Overnight rates
  • Reserve demand


Dive into the research topics of 'The daily market for funds in Europe: What has changed with the EMU?'. Together they form a unique fingerprint.

Cite this