a case study of liquidity management on the 3 … › education › resources › presentations ›...
TRANSCRIPT
![Page 1: A Case Study of Liquidity Management on the 3 … › education › resources › presentations › ...2016/08/03 · A Case Study of Liquidity Management on the 3 August 2016 Author](https://reader034.vdocuments.net/reader034/viewer/2022042316/5f0454ff7e708231d40d744b/html5/thumbnails/1.jpg)
Education
A Case Study of Liquidity Management on 3 August 2016
Chris Becker & Stephanie WoonFinancial Markets Group
![Page 2: A Case Study of Liquidity Management on the 3 … › education › resources › presentations › ...2016/08/03 · A Case Study of Liquidity Management on the 3 August 2016 Author](https://reader034.vdocuments.net/reader034/viewer/2022042316/5f0454ff7e708231d40d744b/html5/thumbnails/2.jpg)
Source: RBA
![Page 3: A Case Study of Liquidity Management on the 3 … › education › resources › presentations › ...2016/08/03 · A Case Study of Liquidity Management on the 3 August 2016 Author](https://reader034.vdocuments.net/reader034/viewer/2022042316/5f0454ff7e708231d40d744b/html5/thumbnails/3.jpg)
Reserve Bank Open Market Operations
What is the main purpose of the Reserve Bank’s open market operations?
… liquidity management.
![Page 4: A Case Study of Liquidity Management on the 3 … › education › resources › presentations › ...2016/08/03 · A Case Study of Liquidity Management on the 3 August 2016 Author](https://reader034.vdocuments.net/reader034/viewer/2022042316/5f0454ff7e708231d40d744b/html5/thumbnails/4.jpg)
Bank A Bank BEconomic
agentsEconomic
agents
Receipts
Payments
Liquidity Management of Interbank Obligations
![Page 5: A Case Study of Liquidity Management on the 3 … › education › resources › presentations › ...2016/08/03 · A Case Study of Liquidity Management on the 3 August 2016 Author](https://reader034.vdocuments.net/reader034/viewer/2022042316/5f0454ff7e708231d40d744b/html5/thumbnails/5.jpg)
Liquidity Management of Interbank Obligations
Bank A Bank B
Reserve Bank
Government
Economic agents
Economic agents
Receipts
Payments
Outflows like tax payments to ATO
Inflows like government welfare payments
![Page 6: A Case Study of Liquidity Management on the 3 … › education › resources › presentations › ...2016/08/03 · A Case Study of Liquidity Management on the 3 August 2016 Author](https://reader034.vdocuments.net/reader034/viewer/2022042316/5f0454ff7e708231d40d744b/html5/thumbnails/6.jpg)
Liquidity Management Illustration
What did the Reserve Bank do in open market operations on a day the target cash rate was changed?
… 3 August 2016
![Page 7: A Case Study of Liquidity Management on the 3 … › education › resources › presentations › ...2016/08/03 · A Case Study of Liquidity Management on the 3 August 2016 Author](https://reader034.vdocuments.net/reader034/viewer/2022042316/5f0454ff7e708231d40d744b/html5/thumbnails/7.jpg)
Liquidity Management on 3 August 2016
Bank A Bank B
Reserve Bank
Government
Economic agents
Economic agents
Receipts
Payments
Outflows -$5 billionInflows +$3 billion
![Page 8: A Case Study of Liquidity Management on the 3 … › education › resources › presentations › ...2016/08/03 · A Case Study of Liquidity Management on the 3 August 2016 Author](https://reader034.vdocuments.net/reader034/viewer/2022042316/5f0454ff7e708231d40d744b/html5/thumbnails/8.jpg)
Liquidity Management on 3 August 2016
Bank A Bank B
Reserve Bank
Government
Economic agents
Economic agents
Receipts
Payments
Outflows -$5 billionInflows +$3 billion
OMOs +$2 billion
![Page 9: A Case Study of Liquidity Management on the 3 … › education › resources › presentations › ...2016/08/03 · A Case Study of Liquidity Management on the 3 August 2016 Author](https://reader034.vdocuments.net/reader034/viewer/2022042316/5f0454ff7e708231d40d744b/html5/thumbnails/9.jpg)
OMO Announcement on 3 August 2016
![Page 10: A Case Study of Liquidity Management on the 3 … › education › resources › presentations › ...2016/08/03 · A Case Study of Liquidity Management on the 3 August 2016 Author](https://reader034.vdocuments.net/reader034/viewer/2022042316/5f0454ff7e708231d40d744b/html5/thumbnails/10.jpg)
Allocation Screen
![Page 11: A Case Study of Liquidity Management on the 3 … › education › resources › presentations › ...2016/08/03 · A Case Study of Liquidity Management on the 3 August 2016 Author](https://reader034.vdocuments.net/reader034/viewer/2022042316/5f0454ff7e708231d40d744b/html5/thumbnails/11.jpg)
Notification of Results
![Page 12: A Case Study of Liquidity Management on the 3 … › education › resources › presentations › ...2016/08/03 · A Case Study of Liquidity Management on the 3 August 2016 Author](https://reader034.vdocuments.net/reader034/viewer/2022042316/5f0454ff7e708231d40d744b/html5/thumbnails/12.jpg)
Repurchase Agreement
Central bank BankInject cash
Securities
First Leg: 3 August 2016
Central Bank
Second Leg: 3 August 2018
D19/27137 GENERAL
Central bank Bank
Central bank BankInject cash
Securities
Second Leg: 3 August 2018
Inject cash
Securities
![Page 13: A Case Study of Liquidity Management on the 3 … › education › resources › presentations › ...2016/08/03 · A Case Study of Liquidity Management on the 3 August 2016 Author](https://reader034.vdocuments.net/reader034/viewer/2022042316/5f0454ff7e708231d40d744b/html5/thumbnails/13.jpg)
Repurchase Agreement
Central bank BankInject cash
Securities
First Leg: 3 August 2016
Central Bank
Second Leg: 15 Aug and 7 Oct
Central bank Bank
Central bank
Drain cash
Securities
![Page 14: A Case Study of Liquidity Management on the 3 … › education › resources › presentations › ...2016/08/03 · A Case Study of Liquidity Management on the 3 August 2016 Author](https://reader034.vdocuments.net/reader034/viewer/2022042316/5f0454ff7e708231d40d744b/html5/thumbnails/14.jpg)