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Lombardpolitik is a possibility of the monetary policy of affecting the creation of money and with it the money supply in a national economy. It covers the following instruments:
- Change of the bank rate for collateral loans: A high bank rate for collateral loans raises the price of the possibility for banks of supplying itself with liquidity. They can assign thereby less credit and the creation of money become smaller. A lowering of the bank rate for collateral loans causes the opposite.
- Introduction of Lombardkontingenten: The quantity that securities at the most which can be pawned is limited according to bank-specific criteria. A sinking of the contingents reduces the creation of money, a rise increases it.
- Change of the quality requirements to securities: Stricter requirements reduce the creation of money, less increase them.
Articles in category "Lombardpolitik"
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