Cover IMF Working Papers
Monetary Impact of a Banking Crisis and the Conduct of Monetary Policy
Author: Ms. Alicia García-Herrero
Series:
IMF Working Papers
Volume/Issue:
Volume 1997: Issue 124
Language:
English
Publication Date:
01 Sep 1997
DOI:
https://doi.org/10.5089/9781451854688.001
ISBN:
9781451854688
ISSN:
1018-5941
Pages:
83
Keywords:
WP; bank; central bank; Venezuela; Argentina; crisis; excess reserves; monetary management; la Nación; distressed bank; bank problem; money multiplier; Banking crises; Demand for money; Credit; Commercial banks; Monetary aggregates; Baltics
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The experiences of seven countries that have undergone banking crises show that crises have significant implications for the short-run stability of the demand for money, the money multiplier, the transmission mechanism, and the signal variables of monetary policy. Monetary and credit instability, coupled with changes in the nature of the monetary and credit aggregates, complicate monetary management. These findings may require redesigning monetary instruments in favor of faster-reacting instruments, such as open market operations, and introducing additional indicators of the monetary stance, such as asset price and exchange rate movements. More frequent reviews of monetary programs may also be necessary.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund