Collateral must be part of monetary policy equation

Incorporating collateral efficiency into IS-LM model reveals side-effects of QE


This article is a summary of chapter 4 of Collateral Markets and Financial Plumbing (3rd Edition), published in March by Risk Books

The renewal of quantitative easing (QE) in response to the Covid-19 pandemic means central banks will continue to play a major role in collateral markets for some time to come. 

QE removes good collateral – typically sovereign bonds, but even corporates and equities – from the market. This has implications for associated rates, such as repo, securities lending

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 or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to View our subscription options


Want to know what’s included in our free membership? Click here

This address will be used to create your account

Digging deeper into deep hedging

Dynamic techniques and gen-AI simulated data can push the limits of deep hedging even further, as derivatives guru John Hull and colleagues explain

You need to sign in to use this feature. If you don’t have a 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