HNU | Applied Research – Capital Market Developments In 2010
The crisis that started in 2009, the so called financial crisis, has in spite of the efforts by the ECB not been counteracted in a measurable way.
This project was therefore aimed at finding alternative monetary and financial recommendations to at least partially counter the shock waves caused by this crisis. On the basis of various indicators, analysis was carried out to identify the transmission mechanisms between monetary phenomena and the real economy.
The principal finding of this analysis was that indicator data sets were best suited to analysing capital market developments and making corresponding monetary and financial policy recommendations.
From early 2009, the signs that the tools of the Euro system monetary policy were no longer sufficient to combat the banking crisis and the resulting economic crisis multiplied. The traditional but also logical close connection between EONIA and the reference interest rate for main refinancing operations no longer applied. Interbank transactions collapsed. Market failure as a result of 'moral hazard' necessitated state intervention and a coordinated monetary policy on the part of the major economic zones using new and unusual measures. European monetary policy also had to find new – for it – ways of preventing a 'meltdown' of the banking system.
Project manager: Prof. Dr. Stefan R. Mayer and Prof. Dr. Albert A. Müller
Duration: Spring to winter 2010