Working Paper Series
The Interplay between Money Market Development and Changes in Monetary Policy Operations in Small European Countries, 1980–2000
() and Lars Oxelheim
Abstract: We study the interplay between money market development
and changes in monetary policy operating procedures in 11 European
countries from c. 1980 up to the launch of EMU. Aspects of money market
development such as the size and structure of different market segments,
and institutional and regulatory changes, are addressed. We recount and
empirically examine the extent of reorientation of monetary policy
instruments away from quantitative direct control instruments toward
indirect market-based instruments. The process of financial deregulation is
uniform across the countries. The path of money market development varies
substantially, whereas changes in central bank instruments show both
similarities and differences. We hypothesise a relationship between the two
processes and provide tentative evidence.
Keywords: Monetary policy operations; Money market; European Union; Deregulation; (follow links to similar papers)
JEL-Codes: E52; E58; G28; N24; (follow links to similar papers)
53 pages, September 22, 2006
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- This paper is published as:
Forssbaeck, Jens and Lars Oxelheim, (2007), 'The Interplay between Money Market Development and Changes in Monetary Policy Operations in Small European Countries, 1980–2000' in Mayes, David and Jan Toporowski (eds.) Open Market Operations and Financial Markets, pages 120-152, Routledge, ISBN 978-0415417754.
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