{
  "title": "Transformation of Markets and Policy Instruments for Open Market Operations",
  "publication": "IMF Working Papers, December 1, 1995",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/transformation-of-markets-and-policy-instruments-for-open-market-operations-1984",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/30/transformation-of-markets-and-policy-instruments-for-open-market-operations-1984",
  "overlayPath": "/en/publications/wp/issues/2016/12/30/transformation-of-markets-and-policy-instruments-for-open-market-operations-1984/index.md",
  "summary": "As developing countries and economies in transition have relied on deregulated, competitive markets to spur growth, their central banks have shifted toward using open market operations as a tool of monetary policy.",
  "sections": [
    {
      "heading": "Summary and core findings",
      "content": "- Developing countries and economies in transition have shifted toward using open market operations as a tool of monetary policy as they rely on deregulated, competitive markets to spur growth.\n- For open market operations to be most effective, they require:\n  - supportive changes in other policy instruments (reserve requirements, discount window),\n  - a competitive banking system and securities market,\n  - adaptation of particular open market or market-type instruments to the stage of, and potential for, market development.\n- The paper assesses options available to a central bank for:\n  - encouraging a competitive market architecture,\n  - designing instruments for implementation of open market operations."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Reform complementary policy instruments (explicitly: reserve requirements and the discount window) to support the transition to open market operations.\n- Promote development of a competitive banking system and securities market as prerequisites for effective implementation.\n- Tailor open market or market-type instruments to the specific stage of market development and its potential, rather than applying a one-size-fits-all instrument set.\n- Central banks should evaluate and select among available instrument designs to align with market architecture and development objectives."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Banking, Central banks, Financial institutions, Financial markets, Government securities, Monetary base, Money, Money markets, Open market operations, Securities markets\n- Keywords: active market, commercial paper, discount window, excess reserves, Government securities, market development, market instrument, market-type operation, Monetary base, Money markets, Open market operations, Securities markets, WP\n\n---\n\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/transformation-of-markets-and-policy-instruments-for-open-market-operations-1984"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/30/transformation-of-markets-and-policy-instruments-for-open-market-operations-1984/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/30/transformation-of-markets-and-policy-instruments-for-open-market-operations-1984/index.json)",
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    "Authors: S. H. Axilrod",
    "Published: December 1, 1995",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451856590.001",
    "Developing countries and economies in transition have shifted toward using open market operations as a tool of monetary policy as they rely on deregulated, competitive markets to spur growth.",
    "For open market operations to be most effective, they require:",
    "The paper assesses options available to a central bank for:",
    "Reform complementary policy instruments (explicitly: reserve requirements and the discount window) to support the transition to open market operations.",
    "Promote development of a competitive banking system and securities market as prerequisites for effective implementation.",
    "Tailor open market or market-type instruments to the specific stage of market development and its potential, rather than applying a one-size-fits-all instrument set.",
    "Central banks should evaluate and select among available instrument designs to align with market architecture and development objectives.",
    "Subject: Banking, Central banks, Financial institutions, Financial markets, Government securities, Monetary base, Money, Money markets, Open market operations, Securities markets",
    "Keywords: active market, commercial paper, discount window, excess reserves, Government securities, market development, market instrument, market-type operation, Monetary base, Money markets, Open market operations, Securities markets, WP"
  ],
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  "generatedAtUtc": "2026-09-17T08:04:06.695Z"
}