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Monetary Policy in the Crisis

Monetary Policy in the Crisis

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Monetary Policy in the Crisis

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  1. Monetary Policy in the Crisis Recent History of Policy and Theory Policy Theory Policy Response to the Crisis Conventional Policy Conventional Unconventional Policy Unconventional unconventional Policy The Future of Monetary Policy Exit Will IT Survive? The International Dimension
  2. Important abbreviations ABCP Asset-Backed Commercial Paper GSFF Growth-Supporting Funding Facility APF Asset Purchase Facility JGBs Japanese government bonds APP Asset Purchase Program J-REITs Jap. real estate investment trusts BOE Bank of England LSAP large-scale asset purchase BOJ Bank of Japan LTROs longer-term refinancing operations CBPP covered bond purchase program MBS mortgage-backed securities CFI corporate finance instruments MMMF money market mutual fund CPFF Commercial Paper Funding Facility MROs main refinancing operations ECB European Central Bank OIS overnight indexed swap ETFs exchange-traded funds OMTs outright monetary transactions FOMC Federal Open Market Committee QE quantitative easing FRFA fixed-rate, full-allotment SBLF Stimulating Bank Lending Facility FROs fixed-rate operations SFSOs special-funds-supplying operations GDP gross domestic product SMP Securities Markets Programme GSE government-sponsored enterprise ZIRP zero interest rate policy Source: Fawley & Neely, Four Stories of Quantitative Easing, Federal Reserve Bank of St. Louis Review, January/February 2013, 95(1), pp. 51-88.
  3. Oct 7 Oct 15 Nov 25 Dec 2 FED creates Commercial PaperLendingFacility ECB offersFixed-Rate Full Allocation repos FED buys $ 600 billion in MBS and GSE (100) BOJ announcesunlimitedlending to banks

    History of Quantitave Easing (Fawley and Neely, 2013)http://research.stlouisfed.org/publications/review/13/01/Fawley.pdf

    2009 Jan 22 March 18 May 7 Dec 1 BOJ buys ¥ 3 trillion commercial paper FED buys $ 1.1 billion in variousassets ECB buys € 60 billion covered bonds BOJ offers ¥ 10 trillion 3-monthloans 2008 2010 March 17 May 10 BOJ offersanother ¥ 10 trillion 3-monthloans ECB buysgovernmentdebt an secondarymarket (SMP)
  4. Composition of QuantitaveEasing (Fawley and Neely, 2013) end-2012 FED $ 1.5 trillion long-termgovernment bonds $ 1.4 trillion mortgage-backedsecurities $ 0.2 trilion GSE debt ECB € 100 billion covered bonds € 220 billion governmentdebt (SMP) BoJ ¥ 150 trillion JapanGovernment Bonds ¥ 3.2 trillion commercial paper ¥ 4.2 trillion corporatedebt ¥ 2.1 trillion other