Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/298517 
Year of Publication: 
2023
Series/Report no.: 
Working Paper No. 8/2023
Publisher: 
Norges Bank, Oslo
Abstract: 
We analyse the behaviour of the Norwegian unsecured overnight interbank market in response to heightened uncertainty and the central bank's liquidity support measures following the Covid-19 pandemic. The liquidity measures enabled banks to fulfil their liquidity needs primarily through participation in extraordinary liquidity auctions. The distribution of central bank reserves across banks did not change due to these measures, but interbank trading fell sharply. Ample liquidity support through the auctions and low interbank trading contributed to low and overly stable overnight rates. Actually, throughout our sample period from 2017 to 2021, the overnight rates remained largely unaffected by fluctuations in uncertainty and overall liquidity conditions.
Subjects: 
The Covid-19 pandemic
distribution of central bank reserves
overnight interbank market
liquidity policy
JEL: 
G21
E42
E47
E58
Persistent Identifier of the first edition: 
ISBN: 
978-82-8379-284-3
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper
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