@techreport{459a874b723241d295ce0c422a3c3bd4,
title = "The day-to-day interbank market, volatility, and central bank intervention in a developing economy",
abstract = "This paper investigates banking system instability vis-{\`a}-vis the day-to-day interbank market and monetary policy effectiveness in the Dominican Republic. The analysis reveals a negative relationship among excess banking system reserves and the interbank interest rate, and shows that in crisis 'news' affect the interbank rate's volatility asymmetrically and non-linearly. The paper also finds that the 2002-3003 banking crisis and the subsequent central bank intervention as a lender of last resort weakened monetary policy's transmission mechanism. These events undermined the ensuing stabilization effort, stressing the pervasive short-run trade-off between preserving macroeconomic stability and safeguarding financial stability, and the pitfalls of monetary policymaking in a highly volatility setting.",
keywords = "Dominican Republic, Economics and econometrics, IMF stabilization programme, financial stability, interbank market, monetary policy",
author = "Sanchez-Fung, \{Jose R.\}",
note = "Note: Economics Discussion Paper, 2008/2",
year = "2008",
month = apr,
language = "English",
series = "Economics Discussion Paper",
publisher = "Faculty of Arts \& Social Sciences, Kingston University",
type = "WorkingPaper",
institution = "Faculty of Arts \& Social Sciences, Kingston University",
}