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Abstract(s)
Money markets were severely impaired by the nancial and subsequent
sovereign debt crises. Although the euro money market has been studied
substantially, little has been done for the particular case of Portugal.
This thesis investigates how the Portuguese part of the euro unse-
cured interbank money market was a ected by the two consecutive crises.
I constructed and adapted a Fur ne-based algorithm to identify the loans
traded and settled in TARGET2, in which at least one of the counterpar-
ties is a Portuguese bank. Identi ed loans have overnight and one-week
maturities. Data shows a clear trend towards a closed interbank money
market. In addition, there is a visibly signi cant reduction in the num-
ber of times banks trade in the market, accompanied by a parallel drop
in volumes transacted. Finally, I nd that interest rates rise above the
benchmark and those in the domestic market are persistently higher than
rates agreed upon through cross-border operations.