Overbidding in fixed rate tenders - an empirical assessment of alternative explanations

  • This paper investigates various theories explaining banks´ overbidding in the fixed rate tenders of the European Central Bank (ECB). Using auction data from both the Bundesbank and the ECB, we show that none of the theories can on its own explain the observed overbidding. This implies that the proposed new rules by the ECB, aimed at neutralizing interest rate expectations, would not eliminate overbidding if the rationing rule in the fixed rate tenders remains unchanged. JEL - Klassifikation: D44 , E32

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Author:Dieter Nautz, Jörg Oechssler
Parent Title (German):Bonn Graduate School of Economics: Bonn Econ Discussion Papers ; 2003,10
Place of publication:Bonn
Document Type:Working Paper
Year of Completion:2003
Year of first Publication:2003
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2007/01/29
Tag:Auktionstheorie; Bank; EU-Staaten; Europäische Wirtschafts- und Währungsunion; Pensionsgeschäft; Zins; Zinstender
Overbidding; monetary policy instruments of the European Central Bank; repo auctions
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht