01762cas a2200253 a 4500 AALejournalIMF019422 230101c9999 xx r poo 0 0eng d 5.00 USD 9781498320474 1018-5941 BD-DhAAL BD-DhAAL Monnet, Eric. Liquidity Ratios as Monetary Policy Tools : Some Historical Lessons for Macroprudential Policy / Eric Monnet, Miklos Vari. Washington, D.C. : International Monetary Fund, 2019. 1 online resource (48 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper explores what history can tell us about the interactions between macroprudential and monetary policy. Based on numerous historical documents, we show that liquidity ratios similar to the Liquidity Coverage Ratio (LCR) were commonly used as monetary policy tools by central banks between the 1930s and 1980s. We build a model that rationalizes the mechanisms described by contemporary central bankers, in which an increase in the liquidity ratio has contractionary effects, because it reduces the quantity of assets banks can pledge as collateral. This effect, akin to quantity rationing, is more pronounced when excess reserves are scarce. Mode of access: Internet Vari, Miklos. IMF Working Papers; Working Paper ; No. 2019/176 Full text available on IMF http://elibrary.imf.org/view/journals/001/2019/176/001.2019.issue-176-en.xml IMF e-Library