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RBA Glossary definition for central bank
central bank – A non-commercial bank, which may or may not be independent of government, which has some or all of the following functions: conduct monetary policy; oversee the stability of the financial system; issue currency notes; act as banker to the government; supervise financial institutions and regulate payments systems.
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MARTIN Gets a Bank Account: Adding a Banking Sector to the RBA's Macroeconometric Model
18 Jan 2022
RDP
2022-01
Research Discussion Paper – RDP 2022-01 MARTIN Gets a Bank Account: Adding a Banking Sector to the RBA's Macroeconometric Model. ... During large downturns, loan losses reduce banks’ capital, and banks respond by reducing their credit supply.
https://www.rba.gov.au/publications/rdp/2022/2022-01.html
Appendix A: Literature Review
18 Jan 2022
RDP
2022-01
This gap between theory and reality also exists within the central bank modelling universe. ... Some central bank stress testing frameworks include an amplifying feedback to the real economy.
https://www.rba.gov.au/publications/rdp/2022/2022-01/appendix-a.html
References
18 Jan 2022
RDP
2022-01
The Effects of Negative Policy Rates on Banks and Firms’, European Central Bank Working Paper Series No 2289, rev June 2020. ... Brassil A, J Cheshire and J Muscatello (2018), ‘The Transmission of Monetary Policy through Banks' Balance Sheets’, in
https://www.rba.gov.au/publications/rdp/2022/2022-01/references.html
Conclusion
18 Jan 2022
RDP
2022-01
does not need to be reduced as considerably as if banks were confined to restricting new loans only. ... For example, a countercyclical capital buffer could be modelled as a temporary decline in banks' capital target. (.
https://www.rba.gov.au/publications/rdp/2022/2022-01/conclusion.html
Read me file
18 Jan 2022
RDP
2022-01
Aggregate bank capital ratio data. Aggregate bank losses data. Aggregate bank debt funding costs data. ... and banks' debt funding costs (once the user has generated the required funding cost data).
https://www.rba.gov.au/publications/rdp/2022/2022-01/read-me.html
MARTIN Gets a Bank Account: Adding a Banking Sector to the RBA's Macroeconometric Model
18 Jan 2022
RDP
2022-01
Research Discussion Paper – RDP 2022-01 MARTIN Gets a Bank Account: Adding a Banking Sector to the RBA's Macroeconometric Model. ... The views expressed in this paper are those of the authors and do not necessarily reflect the views of the Reserve Bank
https://www.rba.gov.au/publications/rdp/2022/2022-01/sections.html
MARTIN Gets a Bank Account: Adding a Banking Sector to the RBA's Macroeconometric Model
18 Jan 2022
RDP
2022-01
How banks respond to these losses is based on the RBA's bank stress testing framework (RBA 2017). ... Some bank deposits always pay near-zero interest. The lower bound does not matter much for these non-interest bearing accounts because banks hedge the
https://www.rba.gov.au/publications/rdp/2022/2022-01/full.html
Introduction
18 Jan 2022
RDP
2022-01
How banks respond to these losses is based on the RBA's bank stress testing framework (RBA 2017). ... That said, BA-MARTIN has the flexibility to explore what would happen if banks restricted new loans only.
https://www.rba.gov.au/publications/rdp/2022/2022-01/introduction.html
Non-technical summary for ‘MARTIN Gets a Bank Account: Adding a Banking Sector to the RBA's Macroeconometric Model’
18 Jan 2022
RDP
2022-01
The further increase in losses causes an even larger response from banks and even greater amplification of the downturn. ... cent – we estimate that loan losses would have been sufficient to reduce banks' capital.
https://www.rba.gov.au/publications/rdp/2022/2022-01/non-technical-summary.html
BA-MARTIN in a Nutshell
18 Jan 2022
RDP
2022-01
These loan losses directly reduce banks' profits; with sufficiently large losses causing banks' capital to fall. ... Australian banks hedge the majority of their interest rate risk (Brassil et al 2018).
https://www.rba.gov.au/publications/rdp/2022/2022-01/ba-martin-in-a-nutshell.html