Uncertain Accommodative Policies as Tools for Financial Stability: Recent Developments

Abstract

The need to address issues pertaining to legal uncertainty, sound governance, public policy considerations – as well as forecasting techniques as a means of mitigating uncertainties in an environment where confidence the inflation target is low, are amongst some of the objectives which this paper aims to address.

Innovative possibilities and opportunities of e digital currencies are then considered – particularly growing considerations of certain central banks to issue their own central bank digital currencies. Questions which still need to be addressed relating to the interest rates to be attached to such currencies and whether or not such interest rates should apply. Further considerations relate to whether the inflation targets should be raised.

These innovative possibilities are considered – with further recommendations for research – before a conclusion is drawn. This paper constitutes a chapter to the volume “Rethinking Regulation and Monetary Policies”.

Keywords: Leaning Against the Wind Policy; Financial Stability, Monetary Policies, Interest Rates, Inflation Targeting, Stable Coins, Central Banks, Regulation, Crypto Assets