The Global Financial Crisis and Central Bank Speak

2014 ◽  
pp. 293-314 ◽  
Author(s):  
Pierre L. Siklos
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Central Bank ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Central Banks ◽  
State Of The Economy ◽  
Policy Statements ◽  
Using Data ◽  
The Global Financial Crisis

Words are critical in how the public perceives the work of central banks and the quality of monetary policy. Press releases that accompany policy rate decisions and, where available, the minutes of central bank committee meetings, are focal points for the media in public discussions about the conduct of monetary policy. Using data from five countries, this chapter examines whether the language used by central banks has changed since the Global Financial Crisis (GFC) began. Briefly, the findings show that concerns about financial stability peaked just as the global financial crisis reached its zenith. However, concerns over uncertainty about the current and anticipated state of the economy have also risen over time. More generally, central bank speak became more aggressive throughout the crisis years. More conventional expressions about the current stance of monetary policy took a back seat to other concerns in central bank policy statements and minutes.

The Global Financial Crisis and Central Bank Speak

2014 ◽  
pp. 592-613
Author(s):  
Pierre L. Siklos
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Central Bank ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Central Banks ◽  
State Of The Economy ◽  
Policy Statements ◽  
Using Data ◽  
The Global Financial Crisis

Words are critical in how the public perceives the work of central banks and the quality of monetary policy. Press releases that accompany policy rate decisions and, where available, the minutes of central bank committee meetings, are focal points for the media in public discussions about the conduct of monetary policy. Using data from five countries, this chapter examines whether the language used by central banks has changed since the Global Financial Crisis (GFC) began. Briefly, the findings show that concerns about financial stability peaked just as the global financial crisis reached its zenith. However, concerns over uncertainty about the current and anticipated state of the economy have also risen over time. More generally, central bank speak became more aggressive throughout the crisis years. More conventional expressions about the current stance of monetary policy took a back seat to other concerns in central bank policy statements and minutes.

scholarly journals Comparison of the Approach of the Czech National Bank and the European Central Bank to the Effects of the Global Financial Crisis

2021 ◽  
Vol 10 (2) ◽  
pp. 18-46
Author(s):  
Andrea Cecrdlova
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Financial Crisis ◽  
Central Bank ◽  
European Central Bank ◽  
Global Financial Crisis ◽  
Central Banks ◽  
European Central ◽  
National Bank ◽  
The Global Financial Crisis

The latest global crisis, which fully erupted in 2008, can have a significant impact on central banks credibility in the long run. During the last crisis, monetary authorities encountered zero interest rate levels and, as a result, started to use non-standard monetary policy instruments. The Czech National Bank decided to use a less standard instrument in November 2013, when it started to intervene on the foreign exchange market in order to keep the Czech currency at level 27 CZK / EUR. However, the European Central Bank also adopted a non-standard instrument, when chose a path of quantitative easing in 2015 in order to support the euro area economy by purchasing financial assets. The question remains whether the approach of Czech National Bank or the approach of European Central Bank in the crisis and post-crisis period was a more appropriate alternative. With the passage of time from the global financial crisis, it is already possible to compare the approaches of these two central banks and at least partially assess what approach was more appropriate under the given conditions. When comparing the central banks approaches to the crisis, the Czech National Bank was better, both in terms of the rate of interest rate cuts and the resulting inflation with regard to the choice of a non-standard monetary policy instrument. The recent financial crisis has revealed the application of moral hazard in practice, both on behalf of the European Central Bank and the Czech National Bank, which may have a significant impact on their credibility and independence in the coming years.

scholarly journals Framework for Preserving Financial Stability in Montenegro

2014 ◽  
Vol 3 (1) ◽  
pp. 27-41 ◽  
Author(s):  
Radoje Žugić ◽  
Nikola Fabris
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Interest Rates ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Central Banks ◽  
Primary Objective ◽  
Policy Framework ◽  
Policy Objective ◽  
The Global Financial Crisis

Abstract The global financial crisis has challenged the traditional monetary policy framework of one instrument (short-term interest rates) - one objective (price stability). More and more central banks nowadays consider financial stability as a monetary policy objective, whereas the Central Bank of Montenegro is the only one that has identified financial stability as its primary objective. As this is a relatively new objective, all central banks endeavouring to attain this objective have been facing numerous difficulties. Therefore, the article analyzes some of these difficulties such as defining financial (in)stability, the selection of indicators, macroeconomic environment for preserving financial stability, and the like. The main objective of the paper is to analyse the framework for preserving financial stability in Montenegro and the challenges that the Central Bank of Montenegro has been facing in accomplishing this objective

scholarly journals Gold Reserve Policies of Selected Central Banks After the Global Financial Crisis: A Comparative Analysis

2018 ◽  
Author(s):  
Zehra Vildan Serin ◽  
Erişah Arıcan ◽  
Başak Tanınmış Yücememiş
Keyword(s):  
Financial Crisis ◽  
Central Bank ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Central Banks ◽  
Gold Reserve ◽  
Bank Reserves ◽  
The Republic ◽  
The Global Financial Crisis ◽  
Republic Of Turkey

After the global financial crisis, central banks have changed attitudes towards gold and have unconventional policy measures, in addition to conventional interest rate cuts. With these measures central banks aimed to support financial stability, and to reduce to potential adverse effects from international capital flows. From the perspective of investors and central banks gold positions and gold reserves are still significant and debatable issues. The purpose of this study is to investigate the composition of central bank reserves the period of 2008 and 2018. In this paper, generally we compared gold reserve holdings of major central banks with Turkey. The Central Bank of the Republic of Turkey (CBRT) has increased gold reserves especially since 2002. With implementing effective policies, CBRT has increased gold holdings in international reserves. CBRT is one of the countries with the highest share of gold reserves in the world.

Central Banks’ New Macroprudential Consensus

2019 ◽  
pp. 481-502
Author(s):  
Michael W. Taylor ◽  
Douglas W. Arner ◽  
Evan C. Gibson
Keyword(s):  
Financial Crisis ◽  
Central Bank ◽  
Financial Stability ◽  
Price Level ◽  
Global Financial Crisis ◽  
Central Banks ◽  
System Stability ◽  
Policy Objective ◽  
Monetary Stability ◽  
The Global Financial Crisis

The traditional central bank consensus is designed around two mandates: monetary and financial stability. Following the Great Stagflation of the 1970s, central banks’ policy objective became biased toward maintaining a low and stable rate of inflation or monetary stability. This was based on the presumption that a stable price level would achieve both monetary and financial system stability. The deemphasis on financial stability remained until the global financial crisis, when the prevailing consensus was exposed for being thoroughly inadequate. A new consensus has emerged that broadens central banks’ financial stability mandate to include macroprudential supervision. This chapter analyzes the new central bank consensus, how this has resulted in institutional redesign, and the effectiveness of discharging postcrisis financial and monetary stability mandates.

scholarly journals Governance of Central Banks as an Entry Point to Establish the Credibility of Monetary Policy

2017 ◽  
Vol 1 (2) ◽  
pp. 120-142
Author(s):  
Haidar Hamza Judy ◽  
Noufel Smaili .
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Central Bank ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Central Banks ◽  
Institutional Framework ◽  
Policy Management ◽  
Multiple Goals ◽  
Effectiveness Of Monetary Policy

Since the recent Global Financial Crisis, Central Banks Have extensive Powers and Objectives include both Monetary Sability and Financial Stability. Which required new arrangements for the Governance of Central Banks and the design of a new Institutional Framework to restrict the use of power by focusing on Independence, Accountability and Transparency. Perception of individuals to risks resulting from shifts in Monetary Policy because of the change in the multiple goals weakens the degree of the effectiveness and acceptance. As the Central Bank is responsible for Monetary Policy management, identify orientations, objectives and choose the appropriate means, it works to ensure the effectiveness of Monetary Policy, and for that warrant provided on the Independence, Accountability, and Respect for the Principles of Transparency, So the application of Banking Governance..

HOW CBN CONFRONTED THE MELTDOWN: THE GLOBAL FINANCIAL CRISIS AND THE CENTRAL BANK OF NIGERIA’S RESPONSE

2017 ◽  
Vol 62 (01) ◽  
pp. 147-161
Author(s):  
EMRE OZSOZ ◽  
MUSTAPHA AKINKUNMI ◽  
ISMAIL CAGRI AY ◽  
ADEMOLA BAMIDELE
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Central Bank ◽  
Global Financial Crisis ◽  
Large Population ◽  
Reserve Requirement ◽  
Policy Responses ◽  
Positive Growth ◽  
Discount Window ◽  
The Global Financial Crisis

This paper provides an analysis of policy responses to the Global Financial Crisis by the Central Bank of Nigeria (CBN). Given its unique position as a major commodity exporter with a large population, Nigerian authorities utilized a mixture of policies including reductions in the monetary policy rate and capital reserve requirement, lending through the expanded discount window, money market interbank transactions guaranty and limitations on deposit money banks’ (DMBs) foreign exchange net open positions. CBN also rolled over margin loans that were extended to equity investors. As a result the country weathered the financial crisis with limited damage and recorded positive growth rates between 2008 and 2010.

scholarly journals Financial Independence of Central Bank through the Balance Sheet Prism

2014 ◽  
Vol 3 (2) ◽  
pp. 37-59 ◽  
Author(s):  
Valentina Ivanović
Keyword(s):  
Central Bank ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Balance Sheet ◽  
Central Banks ◽  
Central Bank Independence ◽  
Financial Independence ◽  
Balance Sheets ◽  
Financial Strength ◽  
The Global Financial Crisis

Abstract The main reason for central bank independence lies in the fact that it is necessary to clearly distinguish spending money from the ability of making money. Independence of central banks is now a characteristic of almost all developed and highly industrialized countries. In this respect, it represents an essential part of the overall economic reality of these countries. Over the past decade or somewhat earlier, the issue of importance of central bank independence has been raised in developing countries, making the institutional, functional, personal and financial independence of central banks current topics for consideration. The key reason for the growing attention to financial independence of central banks is due to the effects of the global financial crisis on their balance sheets and therefore the challenges related to achieving the basic goals of the functioning of central banks - financial stability and price stability. Financial strength and independence of central banks must be developed relative to the policy and tasks that are carried out and risks they face in carrying out of these tasks. Financial independence represents a key base for credibility of a central bank. On one hand, the degree of credibility is associated with the ability of central banks to carry out their tasks without external financial assistance. In order to enhance the credibility of central bank in this regard, it must have sufficient financial strength to absorb potential losses and that power must be continuously strengthened by increasing capital and rearranging profit allocation arrangements. This is particularly important in times of crisis.

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