Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/300134 
Year of Publication: 
2023
Series/Report no.: 
CASE Reports No. 507
Publisher: 
Center for Social and Economic Research (CASE), Warsaw
Abstract: 
The excess liquidity in the euro area is a product of a long period of quantitative easing. It changed the operational framework of the European Central Bank (ECB)'s monetary policy from the scarce reserves system (SRS) to the abundant reserves system (ARS). To eliminate excess liquidity and return to the SRS, the ECB must intensify quantitative tightening, which is also essential for successful disinflation. Fiscal adjustment can help in this process and mitigate the risk of financial instability. This document was provided by the Economic Governance and EMU Scrutiny Unit at the request of the Committee on Economic and Monetary Affairs (ECON) ahead of the Monetary Dialogue with the ECB President on 25 September 2023.
Subjects: 
iquidity
monetary policy
base money
central bank assets
central bank liabilities
scarce reserve system
abundant reserve system
quantitative easing
quantitative tightening
euro area
European Central Bank
US Federal Reserve System
JEL: 
E41
E51
E52
E58
ISBN: 
978-83-67407-10-6
Document Type: 
Research Report

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