We introduce a central bank digital currency (CBDC) in the network of financial accounts. Simulating shift deposits by both households and non-financial corporations from banking sector to bank, we model different responses affected institutional sectors. find that introduction CBDC generates funding shortages banks, which may propagate other In addition, significant adjustments balance sheets ...

We study the impact of monetary policy on supply bank credit when lending is denominated in foreign currencies. Accessing a comprehensive supervisory dataset from Hungary, we find that currency less sensitive to changes domestic conditions than equivalent currency. Changes similarly affect more Hence banks lend multiple currencies channel weakened and international channels become operational. ...

We endogenize circulation of currencies and price formation in a decentralized monetary trading environment with two countries and two currencies. In equilibrium sellers of homogenous goods may post prices in the national or also in the foreign currency, given unobservable buyers’ valuations. We prove that, under different monetary regimes, the absence of well integrated international goods mar...

Four foreign exchange spot rate series, recorded on an hourly basis for a six-month period in 1986 are examined. A seasonal GARCH model is developed to describe the time-dependent volatility apparent in the percentage nominal return of each currency. Hourly patterns in volatility are found to be remarkably similar across currencies and appear to be related to the opening and closing of the worl...