The Bank’s Money Market Framework
10 Pages Posted: 26 Dec 2010
Date Written: December 13, 2010
Abstract
The Bank of England implements the policy stance of the Monetary Policy Committee through its operations in the sterling money markets. It also uses these operations to reduce the costs of disruption to the liquidity and payment services supplied by banks. In order to ensure their continued effectiveness, it was necessary to adapt the framework for these operations in response to the significant changes to financial and monetary conditions that occurred during the recent financial crisis. This article describes how central banks can use their money market operations to implement monetary policy and provide liquidity support to banks and some of the issues that can arise when undertaking operations to achieve these two objectives. The article goes on to explain the Bank’s choices about its own operating framework, including how its thinking has been influenced by the lessons learned during the financial crisis.
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Managing the Central Bank's Balance Sheet: Where Monetary Policy Meets Financial Stability
By Paul Tucker
-
Implementing Monetary Policy: Reforms to the Bank of England's Operations in the Money Market
By Roger Clews
-
Implementing Monetary Policy in the 2000s: Operating Procedures in Asia and Beyond
By Corrinne Ho
-
The Bank’s Balance Sheet During the Crisis
By Michael Cross, Paul Fisher, ...
-
By Benedict Weller, Isabel Von Köppen-mertes, ...
-
Collateral Risk Management at the Bank of England
By Sarah Breeden and Richard Whisker
-
The History of the Quarterly Bulletin
By Richard Windram and John Footman