Central Banking Without Central Bank Money
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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. 1999/092
Subject:
Asset and liability management Banking Financial institutions Financial markets Liquidity Monetary base Money Money markets Payment systems Treasury bills and bonds
English
Publication Date:
July 1, 1999
ISBN/ISSN:
9781451851571/1018-5941
Stock No:
WPIEA0921999
Pages:
42
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