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Unconventional Monetary Policies: An Appraisal

Claudio E. V. Borio

Bank for International Settlements (BIS) - Research and Policy Analysis

Piti Disyatat

affiliation not provided to SSRN

November 1, 2009

BIS Working Paper No. 292

The recent global financial crisis has led central banks to rely heavily on "unconventional" monetary policies. This alternative approach to policy has generated much discussion and a heated and at times confusing debate. The debate has been complicated by the use of different definitions and conflicting views of the mechanisms at work. This paper sets out a framework for classifying and thinking about such policies, highlighting how they can be viewed within the overall context of monetary policy implementation. The framework clarifies the differences among the various forms of unconventional monetary policy, provides a systematic characterisation of the wide range of central bank responses to the crisis, helps to underscore the channels of transmission, and identifies some of the main policy challenges. In the process, the paper also addresses a number of contentious analytical issues, notably the role of bank reserves and their inflationary consequences.

Number of Pages in PDF File: 37

Keywords: unconventional monetary policy, balance sheet policy, credit policy, quantitative easing, credit easing, monetary policy implementation, transmission mechanism, interest rates

JEL Classification: E40, E50, E52, E58, E60

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Date posted: November 23, 2009  

Suggested Citation

Borio, Claudio E. V. and Disyatat, Piti, Unconventional Monetary Policies: An Appraisal (November 1, 2009). BIS Working Paper No. 292. Available at SSRN: https://ssrn.com/abstract=1511623 or http://dx.doi.org/10.2139/ssrn.1511623

Contact Information

Claudio E.V. Borio (Contact Author)
Bank for International Settlements (BIS) - Research and Policy Analysis ( email )
CH-4002 Basel, Basel-Stadt
Piti Disyatat
affiliation not provided to SSRN ( email )
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