Monetary policy frameworks and central bank market operations

Note: This is the first versin of this document, dated December 2007. The Markets Committee comprises senior officials responsible for market operations at central banks of the G10 and some of the largest non-G10 economies. Formerly known as the Committee on Gold and Foreign Exchange, it was established in 1962 following the setting-up of the so-called Gold Pool. Then, members continued to meet at the BIS for open and informal exchanges of views. Over the years, the focus of these discussions has shifted towards coverage of recent developments in financial markets, an exchange of views on possible future trends, and consideration of the short-run implications of particular current events for the functioning of these markets and central bank operations. The Committee also serves as a forum for central banks to discuss the specifics of their own market operations. An important feature that has been constantly highlighted by the discussions is that central banks' decisions and actions are shaped by the frameworks in which they operate. While these monetary policy frameworks share a number of similarities across countries, there are also noticeable differences, in particular at the operational level. Monetary policy frameworks also evolve. To facilitate its discussions, the Markets Committee condensed the information on the monetary policy frameworks and market operations of its members into a single and easily accessible document. This "Compendium" includes information on four main aspects: monetary policy committees (or similar decision-making bodies); policy implementation; market operations; and monetary policy communication. The Committee thinks that sharing such information with market participants and the public at large could also enhance market transparency and the understanding of central bank actions. The information will be regularly updated. The descriptions of monetary policy frameworks presented in the Compendium have been submitted by the respective central banks and either reproduce or summarise information which is already publicly available in their publications or on their websites. The original central bank publications shall remain the ultimate references.