Some Issues in the Design of Monetary Instruments for the Operation of European Economic and Monetary Union
IMF Working Papers, December 1, 1997
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- Some Issues in the Design of Monetary Instruments for the Operation of European Economic and Monetary Union
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Bibliographic details
- Authors: Paul Louis Ceriel Hilbers, Arto Kovanen, Charles Enoch
- Published: December 1, 1997
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451858914.001
Summary
- The European Monetary Institute has been working with national central banks of the European Union (EU) to prepare instruments for the operation of monetary policy in Stage 3 of European Economic and Monetary Union.
- Several publications describing the proposed arrangements have been issued.
- This paper briefly summarizes the arrangements and identifies areas requiring important decisions or refinements, including:
- the choice of counterparties in fine-tuning open market operations;
- the design of reserve requirements;
- the signaling function of monetary operations;
- payment system relationships with non-EMU participants in the EU.
Major findings and issues identified
- Choice of counterparties in fine-tuning open market operations:
- The selection of counterparties remains an important outstanding decision affecting the implementation of fine-tuning operations.
- Design of reserve requirements:
- Reserve requirement design is highlighted as an area needing further decisions or refinements.
- Signaling function of monetary operations:
- The role of monetary operations as a signaling mechanism for policy intentions is identified as requiring attention.
- Payment system relationships:
- Relationships between EMU payment systems and non-EMU participants in the EU need to be addressed in the operational framework.
Subject coverage and keywords
- Subject: Banking, Central banks, Credit, Financial services, Market interest rates, Monetary policy, Money, Open market operations, Reserve requirements, Standing facilities
- Keywords: asset, Credit, credit operation, ECB approval, ECB operating procedures, ECB payment mechanism, ECB state, ECB statute, EMU, ESCB monetary policy operations, Europe, financial institution, interest rate, Market interest rates, Monetary Operations, monetary policy, NCBs, Open market operations, Reserve requirements, Standing facilities, WP