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Monetary policy implementation: common goals but different practices


  • Marlene Amstad
  • Antoine Martin


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.

Suggested Citation

  • Marlene Amstad & Antoine Martin, 2011. "Monetary policy implementation: common goals but different practices," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 17(Nov).
  • Handle: RePEc:fip:fednci:y:2011:i:nov:n:v.17no.7

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    References listed on IDEAS

    1. Todd Keister & James J. McAndrews, 2009. "Why are banks holding so many excess reserves?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 15(Dec).
    2. Puriya Abbassi & Dieter Nautz & Christian Offermanns, 2010. "Interest Rate Dynamics and Monetary Policy Implementation in Switzerland," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 146(I), pages 313-340, March.
    3. Antoine Martin & James J. McAndrews & David R. Skeie, 2011. "A note on bank lending in times of large bank reserves," Staff Reports 497, Federal Reserve Bank of New York.
    4. Michael J. Fleming & Nicholas Klagge, 2010. "The Federal Reserve's foreign exchange swap lines," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 16(Apr).
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    Cited by:

    1. Adrien Alvero & Andreas M. Fischer, 2016. "Exchange rate floor and central bank balance sheets: Simple spillover tests of the Swiss franc," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 67(02), pages 31-50, August.
    2. Kedan, Danielle & Stuart, Rebecca, 2014. "Operational targets and the yield curve: The euro area and Switzerland," Economic Letters 04/EL/14, Central Bank of Ireland.
    3. Morgunov, V.I., 2016. "The Liquidity Management of the Banking Sector and the Short-Term Money Market Interest Rates," Working Papers 21311, Russian Presidential Academy of National Economy and Public Administration.


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