tailieunhanh - WORKING PAPER SERIES NO 748 / MAY 2007: FINANCIAL DOLLARIZATION THE ROLE OF BANKS AND INTEREST RATES

A final way banks raise funds in the money market is through repurchase agreements (RPs). An RP is a sale of securities with a simultaneous agreement by the seller to repurchase them at a later date. (For the lender—that is, the buyer of the securities in such a transaction—the agreement is often called a reverse RP.) In effect this agreement (when properly executed) is a short-term collateralized loan. Most RPs involve . government securities or securities issued by government-sponsored enterprises. Banks are active participants on the borrowing side of the RP market. . | EUROPEAN CENTRAL BANK EUROSYSTEM WORKING PAPER SERIES FINANCIAL DOLLARIZATION THE ROLE OF BANKS AND INTEREST RATES NO 748 I MAY 2007 by Henrique S. Basso Oscar Calvo-Gonzalez and Marius Jurgilas EUROPEAN CENTRAL BANK EUROSYSTEM WORKING PAPER SERIES NO 748 I MAY 2007 FINANCIAL DOLLARIZATION THE ROLE OF BANKS AND INTEREST RATES 1 by Henrique S. Basso 2 Oscar Calvo-Gonzalez 3 and Marius Jurgilas 4 In 2007 all ECB publications feature a motif taken from the 20 banknote. This paper can be downloaded without charge from http or from the Social Science Research Network electronic library at http abstract_id 983483. I We thank an anonymous referee of the ECB Working Paper Series for many useful comments. Any views expressed in this paper are those of the authors and do not necessarily represent those of the ECB. 2 School of Economics Mathematics and Statistics Birkbeck College University of London Malet Street London WC1E 7HX United K ngdom e-mail hsbasso@ 3 European Central Bank Kaiserstrasse 29 60311 Frankfurt am Main Germany e-mail 4 Department of Economics College of Liberal Arts University of Connecticut 341 Mansfield Road Unit1063 CT 06269-1063 USA e-mail European Central Bank 2007 Address Kaiserstrasse 29 60311 Frankfurt am Main Germany Postal address Postfach 16 03 19 60066 Frankfurt am Main Germany Telephone 49 69 1344 0 Internet http Fax 49 69 1344 6000 Telex 411 144 ecb d All rights reserved. Any reproduction publication and reprint in the form of a different publication whether printed or produced electronically in whole or in part is permitted only with the explicit written authorisation of the ECB or the author s . The views expressed in this paper do not necessarily reflect those of the European Central Bank. The statement of purpose for the ECB Working Paper Series is available from the ECB website http . ISSN 1561-0810 print ISSN 1725-2806