Monetary Policy Implementation: Common Goals But Different Practices
11 Pages Posted: 7 Dec 2011
Date Written: November 1, 2011
While the goals that guide monetary policy in different countries are very similar, central banks diverge in their methods of implementing policy. This study of the policy frameworks of four central banks — the Federal Reserve, the European Central Bank, the Bank of England, and the Swiss National Bank — focuses on two notable areas of difference. The first is the choice of an interest rate target, a standard feature of conventional monetary policy. The second is the choice of instruments for managing the central banks’ expanded balance sheets — a decision made necessary by the banks’ unconventional practice of acquiring large quantities of assets during the financial crisis.
Keywords: Monetary policy implementation, Financial crisis
JEL Classification: E52, E58
Suggested Citation: Suggested Citation