tailieunhanh - WORKING PAPER SERIES NO 868 / FEBRUARY 2008: PURDAH ON THE RATIONALE FOR CENTRAL BANK SILENCE AROUND POLICY MEETINGS

The similarity in sign and significance of the estimated coefficients for banks’ leverage to the standard corporate finance regression suggests that a pure regulatory view does not apply to banks’ capital structure. But can the results be explained by banks holding buffers of discretionary capital in order to avoid violating regulatory thresholds? Recall from Table IV that banks with higher market-to-book ratios, higher profits and that pay dividends should hold less discretionary capital since they can be expected to face lower costs of issuing equity. However, these banks hold more discretionary capital. Moreover, collateral matters for the banks in. | EUROPEAN CENTRAL BANK EUROSYSTEM WORKING PAPER SERIES NO 868 I FEBRUARY 2008 PURDAH by Michael Ehrmann and Marcel Fratzscher ON THE RATIONALE FOR CENTRAL BANK SILENCE AROUND POLICY MEETINGS EUROPEAN CENTRAL BANK EUROSYSTEM In 2008 all ECB publications feature a motif taken from the 10 banknote. WORKING PAPER SERIES NO 868 I FEBRUARY 2008 PURDAH ON THE RATIONALE FOR CENTRAL BANK SILENCE AROUND POLICY MEETINGS 1 Michael Ehrmann and Marcel Fratzscher 2 This paper can be downloaded without charge from http or from the Social Science Research Network electronic library at http abstract_id 1090543. This paper is forthcoming in the Journal of Money Credit and Banking. We would like to thank Terhi jokipii and Bjorn Kraaz for excellent research assistance Niels Bũnemann for some information about the purdah practices of central banks and Magnus Andersson Alan Blinder Alex Cukierman and Bernhard Winkler as well as seminar participants at the ECB for comments. This paper presents the authors personal opinions and does not necessarily reflect the views of the European Central Bank. 2 Both authors European Central Bank Kaiserstrasse 29 603ÌÌ Frankfurt am Main Germany e-mail European Central Bank 2008 Address Kaiserstrasse 29 60311 Frankfurt am Main Germany Postal address Postfach 16 03 19 60066 Frankfurt am Main Germany Telephone 49 69 1344 0 Website http Fax 49 69 1344 6000 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 . eu rop a. e u pub sci entfi c wps date htm I . html ISSN