Central Banking Without Central Bank Money

Author/Editor:

Alain Ize ; Arto Kovanen ; Timo Henckel

Publication Date:

July 1, 1999

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Given the rapidly declining demand for central bank reserves and their gradual replacement in wholesale payments by alternative forms of money—clearinghouse moneyand treasury money—this paper discusses whether the complete extinction of base money could undermine monetary control. It argues that such concerns are misplaced since central banks can target interest rates and inflation even in the absence of base money. The paper explores implications for current and future central banking, including monetary and foreign exchange operations, lender of last resort, coordination between public debt and monetary management, and design of operating rules in currency boards.

Series:

Working Paper No. 99/92

Subject:

English

Publication Date:

July 1, 1999

ISBN/ISSN:

9781451851571/1018-5941

Stock No:

WPIEA0921999

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

42

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