Over the long-term refinancing business the European central bank puts approximately a quarter of the refinancing volume to the business banks at the disposal. The long-term refinancing business is security pension business and belongs to the open market business. The business banks receive thereby from the central bank money against the deposit of collateral (securities), which they can pass on to their customers.

The long-term refinancing business is thus liquidity-supplying business.

The long-term refinancing business is also an instrument of the monetary policy. The central bank can affect the consumption and investments and so the economic situation over the quantity of the provided money. It operates an expansive monetary policy, whereby credits become cheaper, in an economically good phase a kontraktive monetary policy in an economically bad phase, whereby the inflation is kept low.

The initiative to open market business proceeds after the standard tender from the European central bank (EZB). The money becomes once per month (the dates are communicated in advance by the tender calendar) of the business banks for 3 months with interest tender after American (before March 1999: Dutch) procedure offered. The national central banks winding the business for the EZB off.

The long-term refinancing business serves basic supply (basis tender) as addition of the more important main refinancing instrument, is this relieving and is a kind.

A interest rate is not fixed.

Articles in category "Long-term refinancing business"

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