The transmittance of changes of the prime rate to the long end of the yield curve - and why it actually does not work

and why it actually does not work

Business & Finance, Finance & Investing, Banks & Banking
Cover of the book The transmittance of changes of the prime rate to the long end of the yield curve - and why it actually does not work by Christoph Müller, GRIN Verlag
View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart
Author: Christoph Müller ISBN: 9783638008488
Publisher: GRIN Verlag Publication: February 21, 2008
Imprint: GRIN Verlag Language: English
Author: Christoph Müller
ISBN: 9783638008488
Publisher: GRIN Verlag
Publication: February 21, 2008
Imprint: GRIN Verlag
Language: English

Seminar paper from the year 2007 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 1,0, Baden-Wuerttemberg Cooperative State University (DHBW), 22 entries in the bibliography, language: English, abstract: In February 2005, Fed's Chairman Alan Greenspan wondered why the long end of the yield curve did not show any reaction to the hiking prime rate. Normally, a hiking prime rate gets through the complex transmittance-mechanism to the long end of a yield curve. But in this cycle since June 2004, nothing changed at the long end. An explanation via the classic interest theories does not come to a satisfiying result, so the situation must be explained by the actual circumstances. The main reason is a very high liquidity which has its origin in the last economic cycle. The excessive investments in 1999 and 2000 still keep the enterprises busy. They do not invest in fixed assets, which would mean a higher capital demand, but on the capital market; and they pay back their debts, which also leads to a falling yield. The liquidity supply from east asia causes a high demand for US-$ - bonds as well. China for example holds more than one trillion US-$ as monetary reserve to keep their exchange rate low. A combination of many more, different facts, which deserve closer attention, lead to the answer to Greenspan's conundrum.

View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart

Seminar paper from the year 2007 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 1,0, Baden-Wuerttemberg Cooperative State University (DHBW), 22 entries in the bibliography, language: English, abstract: In February 2005, Fed's Chairman Alan Greenspan wondered why the long end of the yield curve did not show any reaction to the hiking prime rate. Normally, a hiking prime rate gets through the complex transmittance-mechanism to the long end of a yield curve. But in this cycle since June 2004, nothing changed at the long end. An explanation via the classic interest theories does not come to a satisfiying result, so the situation must be explained by the actual circumstances. The main reason is a very high liquidity which has its origin in the last economic cycle. The excessive investments in 1999 and 2000 still keep the enterprises busy. They do not invest in fixed assets, which would mean a higher capital demand, but on the capital market; and they pay back their debts, which also leads to a falling yield. The liquidity supply from east asia causes a high demand for US-$ - bonds as well. China for example holds more than one trillion US-$ as monetary reserve to keep their exchange rate low. A combination of many more, different facts, which deserve closer attention, lead to the answer to Greenspan's conundrum.

More books from GRIN Verlag

Cover of the book Pfadfinderarbeit als eine Form gemeindepädagogischer Jungenarbeit by Christoph Müller
Cover of the book Der brasilianische Kriminalroman - Eine Untersuchung anhand Rubem Fonsecas 'Bufo & Spallanzani' by Christoph Müller
Cover of the book Kooperatives Verhalten in Spielshows. Eine Analyse auf Basis von Golden Balls by Christoph Müller
Cover of the book Die Vokalstücke in den 'Capricci a due stromenti' von Bellerofonte Castaldi by Christoph Müller
Cover of the book Kann man mit Hilfe der symbolischen Interaktion soziale Ordnung herstellen? by Christoph Müller
Cover of the book Stanley Milgrams Experiment by Christoph Müller
Cover of the book Obstacles to Growth for Small and Medium Enterprises. An Analysis of the SAARC Countries Pakistan, Bangladesh and India by Christoph Müller
Cover of the book Sport und Nahrungsergänzungsmittel by Christoph Müller
Cover of the book Frankreichbilder in der medialen Präsentation des Tourismus by Christoph Müller
Cover of the book Vorgehensweise bei einer Inhaltsanalyse by Christoph Müller
Cover of the book Werbung in China by Christoph Müller
Cover of the book Emile Durkheim - Soziale Differenzierung und ihre Konsequenzen für das Erziehungssystem by Christoph Müller
Cover of the book Soziale und ethische Aspekte der Einführung des Diphtherieheilserums nach Behring und Ehrlich by Christoph Müller
Cover of the book Huntingtons Theorie eines Bruchlinienkrieges im Rahmen des israelisch-palästinensischen Konflikts seit Camp David 2 by Christoph Müller
Cover of the book Safe Abortion. Way forwards on one of the neglected Sexual and Reproductive Health issue by Christoph Müller
We use our own "cookies" and third party cookies to improve services and to see statistical information. By using this website, you agree to our Privacy Policy