term 1 lecture 6 - risk management and money multiplier Flashcards
what is broad money?
what do central banks need to control?
broad money
does the central bank control broad money directly?
whay is the formula for the money multiplier?
what is the equation of exchange and money supply?
why is the money multiplier an important indicator?
what occured to the money multplier in October 2008?
why do banks hold excess reserves?
why might non performing loans be a reason to keep excess loans?
what is the threat behind the precautionary demand for reserves and the policy implications?
what is the formula for the precautionary demand for reserves?
what is the reasoning behind the speculative demand for money?
why might the remuneration of reserves create demand for money?
what are the simple model assumptions about the credit risk and demand for reserves?
in the model, what is the effect of an increase in the risk free interest rate?
what are the liabities in the models bank balance sheet?
what are the assets in the models bank balance sheet?
what is the formula for the money multiplier in the model?
m=D/R
what is the formula for the risk management solvency constraint?
what is the value at risk?
how does the deposits to reserves ratio relate to the risk management solvency constraint?
what impacts the multiplier/ deposits to reserves ratio in the model?
what was the relation between the M1 multiplier and the T bills rate before the crisis?
what was the relation between the M1 multiplier and the T bills rate after the crisis?
why was there a change in the
what is the impact of risk on the money multiplier?
what is the summary of the risk management and multiplier?
