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Monetary policy in the grip of a pincer movement
Monetary policy has come under strain since the global financial crisis (GFC) of 2007–09. Once the GFC broke out central banks’ swift and determined response was essential to stabilise markets and to avoid a self-reinforcing downward spiral between the financial system and the real economy. But putting ...
Negative interest rates: lessons from the Euro area
In June 2014 the European Central Bank (ECB) decided to cut the rate on its deposit facility (DFR) by 10 basis points (bp) into negative territory an unprecedented move as no major central bank had used negative rates before. This decision was part of a more comprehensive monetary policy easing package ...
Central banks going long
Long-term interest rates have for long played an ambiguous role in the operation of monetary policy. The Federal Reserve Act of 1913 that created the Federal Reserve set the monetary policy objective to be: '... to promote effectively the goals of maximum employment stable prices and moderate long-term ...
Monetary policy and financial stability: transmission mechanisms and policy implications: an overview
Financial stability understood as a situation when the financial system smoothly performs its function of allocating capital and adverse shocks are unlikely to be amplified has been for long a key concern for policymakers and in particular for monetary authorities. However until 10 years ago most ...