Prime rate, key interest rate, central rate
The interest rate or rates set by the central bank as a benchmark for financial transactions in general, which should provide market participants with guidance for their operations. – Within the Eurosystem, these are: – the minimum bid rate on the main refinancing operations, – the interest rate on the marginal lending facility, and – the interest rate on the deposit facility. – Prior to the changeover from the quantity tender rate to the interest tender rate in the main refinancing operations, the quantity tender rate was the most important key interest rate. This function is now performed by the minimum bid rate on the ECB’s main refinancing operations. – Empirically proven beyond doubt (it has been empirically proven beyond doubt) is that, contrary to what is stated in many textbooks, a cut in the key interest rate does not in itself induce investment.- See bank rate, prime rate, observation, [very] narrow, fragmentation, negative interest rate, prime rate, stealth policy, transmission mechanism, monetary, interest (rate), interest rate channel, interest rate corridor, interest rate, kept low, interest rate transmission, interest rate pass-through. – Cf. the respective data in the annex “Euro area statistics,” annex “Monetary statistics” of the respective ECB Monthly Bulletin; there, also note the “Notes” following; ECB Monthly Bulletin of December 2008, pp. 49 ff. (correlation between key ECB interest rates and short-term interest rates on the market during the financial crisis; overviews, ECB Monthly Bulletin of August 2009, pp. 103 ff. (effect of a change in the key interest rate theoretically and empirically; overviews), ECB Annual Report 2009, pp. 53 ff. (pass-through of changes in the key interest rate theoretically and empirically; overviews), ECB Monthly Report of August 2013, pp. 83 ff. (detailed, textbook presentation; many overviews) ECB Monthly Report of January 2014, pp. 75 ff. (on the ECB’s interest rate policy; many overviews).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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