BoJ research warns of unintended policy consequences from Libor

bank-of-japan

A working paper published by the Bank of Japan on December 28 finds there are both positive and negative effects that may follow from the use of a reference rate such as Libor.

The paper's author, Nao Sudo, suggests reference rates may promote economic efficiency by reducing "informational friction" in credit markets and allowing more accurate forecasting. This in turn reduces credit spreads and promotes macroeconomic stability.

However, the reference rate can also be a source of noise in credit

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.centralbanking.com/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: