Monetary Policy and Financial Market Evolution

<p>The financial and economic crisis that has hit many economies in recent years has significantly increased the activity of central banks. After using the standard instruments of conducting monetary policy, in view of the obstruction of monetary impulse transmission channels, they reached for non-standard instruments. Among them, asset purchase programs played a signifciant role. The European Central Bank (ECB) launched the largest asset purchase programme (APP) of this type in 2014 and expired in December 2018. The aim of the undertaken activities was to improve the situation on the financial market and stimulate economic growth. The article reviews the literature and results of research on the effects of the program and indicates the possibility of using the ECB’s experience in conducting monetary policy by the National Bank of Poland.</p>

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Special Issue: Financial Market Dynamics, Monetary Policy, Investment and Trade. Papers Presented at the Fourth International Symposium in Computational Economics and Finance (Paris, April 14–16, 2016)

Open Economies Review ◽

10.1007/s11079-018-9493-0 ◽

2018 ◽

Vol 29 (2) ◽

pp. 211-213

Author(s):

Fredj Jawadi

Keyword(s):

Monetary Policy ◽

International Symposium ◽

Financial Market ◽

Computational Economics ◽

Market Dynamics ◽

Special Issue ◽

Fourth International Symposium

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Central bank's communication and markets' reactions: Polish evidence

International Journal of Emerging Markets ◽

10.1108/ijoem-09-2020-1061 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Cited By ~ 1

Author(s):

Janusz Brzeszczyński ◽

Jerzy Gajdka ◽

Tomasz Schabek ◽

Ali M Kutan

Keyword(s):

Monetary Policy ◽

Foreign Exchange ◽

Financial Market ◽

Foreign Exchange Market ◽

Emerging Market ◽

Public Information ◽

Exchange Market ◽

Market Segments ◽

Content Type ◽

The Impact

PurposeThis study contributes to the pool of knowledge about the impact of monetary policy communication of central banks on financial instruments' prices and assets' value in emerging markets.Design/methodology/approachEmpirical analysis is executed using the National Bank of Poland (NBP) announcements about its monetary policy covering the data from the broad financial market in its three main segments: stock market, foreign exchange market and bonds market. The reactions are measured relative to the changes in the NBP announcements and also with respect to investors' expectations. Autoregressive conditional heteroscedasticity (ARCH) models with dummy variables are used as the main methodological tool.FindingsBonds market and foreign exchange market are the most sensitive market segments, while interest rate and money supply are the most influential types of announcements. The changes of the revealed new macroeconomic figures had more impact on assets' prices movements than the deviations from their expectations. Moreover, greater diversity of the Monetary Policy Council (MPC) members' opinions on the voted motions, captured in the MPC voting reports, is associated with more cases of statistically significant NBP communication events.Practical implicationsThe findings have direct relevance for fund managers, portfolio analysts, investors and also for financial market regulators.Originality/valueThe results provide novel evidence about how the emerging financial market responds to monetary policy announcements. They help understand the nature of the impact of public information on financial assets' valuation and on movements of their prices, analysed comprehensively in three market segments, in the emerging market environment.

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Monetary Policy, Development of Financial Market and Banking Lending : An Analysis of the Bank-Lending Channel in Malaysia

Malaysian Management Journal ◽

10.32890/mmj.5.1-2.2001.8591 ◽

2020 ◽

Author(s):

Noor A. Ghazali ◽

Aisyah A. Rahman

Keyword(s):

Monetary Policy ◽

Financial Market ◽

Bank Lending ◽

Monetary Authority ◽

Credit Channel ◽

Direct Influence ◽

Economic Activities ◽

Bank Lending Channel ◽

Lending Channel ◽

Effect Of Monetary Policy

Recent resurgence of interest in understanding the transmission mechanism of monetary policy focuses on two main channels of explanation, i.e. the money and credit channel. This paper investigates a version of the credit channel, i.e. the bank-lending channel for the Malaysian economy. The bank-lending channel assigns a critical role for the supply of bank loans in transmitting the effect of monetary policy on real economic activities. The study analyzes the effect of monetary policy on the ability and willingness of Malaysian banks to issue loans with respect to the development in the open financial market. Specifically it argues on the changes of the pattern of influence as progress in the open financial market takes place. A multivariate system analysis of vector auto regression (VAR) is used. The results show that prior to the progress in open financial market, the monetary authority has a direct influence on supply of loans of banks. However, this direct influence lessens as the open financial market develops. Loans are more affected by interest rates spread that dictates conditions in open financial markets. Thus, the ability of the monetary authority to steer real economic activities is subjected to development in the financial market.

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