Essays on two new central banking debates : central bank financial strength and monetary policy outcome : the instability of the transmission of monetary policy to deposit rates after the global financial crisis.

Summary This thesis addresses two new debates on central banking that emerged after the 2008 financial crisis: the debate on financial losses on central banks' balance sheets, and the debate on the high level of bank rates relative to market rates after the crisis. The first two chapters are part of the first debate. The link between the financial soundness of central banks and inflation is studied empirically in the first chapter, using a large panel of 82 countries. Theoretically, this link is potentially present when the government does not financially support the central bank and the latter can therefore only rely on itself to improve its financial situation. The results of the first chapter show that in practice this is indeed the case: deteriorations in central bank balance sheets are accompanied by higher inflation when the central bank has no fiscal support. The results do not show a link in a general context, as the theory suggests. The second chapter analyzes and conceptualizes the argument that a central bank may end a fixed or quasi-fixed exchange rate regime out of fear of future financial losses. The analysis is then applied to the case of the floor rate implemented by the Swiss Central Bank (SNB) between 2011 and 2015 vis-à-vis the euro. This argument has been put forward by many to explain the end of the floor rate policy in Switzerland, without any research prior to this one assessing its relevance. The empirical estimates in Chapter 2 show that this argument had credibility: they show that in credible scenarios, breaking the peg with the euro 17 months later, the SNB would have incurred a considerable loss, exceeding a threshold perceived as limiting by many central bankers. The last chapter of this thesis focuses on the spread between deposit rates and the market rate in the eurozone (EURIBOR), which became significantly positive after the crisis, leading some to speak of the "over-remuneration" of deposits. This chapter argues that the majority of this gap is not explained by abnormal deposit behavior, as some have argued, but rather by a loss of relevance of EURIBOR. Constructing an alternative to EURIBOR, this chapter concludes that bank risk has had a primary influence on the level of deposit remuneration in the post-crisis world.