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Central Banking Without Central Bank Money
Author:
Mr. Alain Ize
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Mr. Arto Kovanen
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Timo Henckel null

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Series:
IMF Working Papers
Volume/Issue:
Volume 1999: Issue 092
Language:
English
Publication Date:
01 Jul 1999
DOI:
https://doi.org/10.5089/9781451851571.001
ISBN:
9781451851571
ISSN:
1018-5941
Pages:
42
Keywords:
WP; monetary policy; lender of last resort; balance sheet; foreign exchange; money market; Monetary operations; payments system; inflation targeting; intervention band; settlement balance; end-of-day liquidity support; discount window; debtor bank; bank reserves; central bank window; reaction function; Monetary base; Treasury bills and bonds; Payment systems; Money markets; Liquidity
Legal-disclaimer:
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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Given the rapidly declining demand for central bank reserves and their gradual replacement in wholesale payments by alternative forms of money—clearinghouse moneyand treasury money—this paper discusses whether the complete extinction of base money could undermine monetary control. It argues that such concerns are misplaced since central banks can target interest rates and inflation even in the absence of base money. The paper explores implications for current and future central banking, including monetary and foreign exchange operations, lender of last resort, coordination between public debt and monetary management, and design of operating rules in currency boards.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund