IDEAS home Printed from https://ideas.repec.org/a/wun/journl/tjev05y2012i18a09.html
   My bibliography  Save this article

Central banks, monetary policy and financial stability

Author

Listed:
  • Silviu CERNA

    (Faculty of Economics and Business Administration, West University of Timisoara, Romania)

Abstract

The "Great moderation" has led the economists and policymakers to believe that the monetary policy pursued in the late '80s and carried on until the financial crisis in 2007, is correct. The crisis, however, has forced them to rethink this concept. The aim of this paper is to present the elements that appear to currently outline a new framework for monetary policy, in which financial stability is an important goal. In the beginning of the paper, the monetary policy applied before the crisis by the major central banks of the world is presented. Next, the characteristics of the new monetary policy are analysed, wherein financial stability occupies an important role. This rethinking in regard to the role and functions of the central bank requires it to possess more human and technical resources to perform its new task, which is more complex than mere monetary stability. Also, this new monetary policy stance involves closing the links between the central bank and the supervisors and the exchange of information with all financial participants.

Suggested Citation

  • Silviu CERNA, 2012. "Central banks, monetary policy and financial stability," Timisoara Journal of Economics, West University of Timisoara, Romania, Faculty of Economics and Business Administration, vol. 5(18), pages 336-379.
    • Handle: RePEc:wun:journl:tje:v05:y2012:i18:a09
    as

    Download full text from publisher

    File URL: https://tje.uvt.ro/index.php/tje/article/download/164/pdf
    Download Restriction: no
    File URL: https://tje.uvt.ro/index.php/tje/article/view/164
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michael Woodford, 2010. "Financial Intermediation and Macroeconomic Analysis," Journal of Economic Perspectives, American Economic Association, vol. 24(4), pages 21-44, Fall.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ioana Manuela Mîndrican, 2023. "Monetary policy measures and strategies in the context of the adoption of the euro currency," Journal of Financial Studies, Institute of Financial Studies, vol. 14(8), pages 84-97, May.
    2. repec:fst:rfsisf:v:8:y:2023:i:14:p:84-97 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Schreiner, Lena & Madlener, Reinhard, 2022. "Investing in power grid infrastructure as a flexibility option: A DSGE assessment for Germany," Energy Economics, Elsevier, vol. 107(C).
    2. Hollander, Hylton & Liu, Guangling, 2016. "Credit spread variability in the U.S. business cycle: The Great Moderation versus the Great Recession," Journal of Banking & Finance, Elsevier, vol. 67(C), pages 37-52.
    3. Tobias Adrian & Nellie Liang, 2018. "Monetary Policy, Financial Conditions, and Financial Stability," International Journal of Central Banking, International Journal of Central Banking, vol. 14(1), pages 73-131, January.
    4. Semyon Malamud & Andreas Schrimpf, 2016. "Intermediation Markups and Monetary Policy Passthrough," Swiss Finance Institute Research Paper Series 16-75, Swiss Finance Institute.
    5. Coimbra, Nuno, 2020. "Sovereigns at risk: A dynamic model of sovereign debt and banking leverage," Journal of International Economics, Elsevier, vol. 124(C).
    6. Teodoro Dario Togati, 2012. "How to Explain the Persistence of the Great Recession? A Balanced Stability Approach," Working papers 014, Department of Economics, Social Studies, Applied Mathematics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    7. Nicola Acocella & Laura Bisio & Giovanni Di Bartolomeo & Alessandra Pelloni, "undated". "Labor market imperfections, real wage rigidities and financial shocks," Working Papers 80/11, Sapienza University of Rome, Metodi e Modelli per l'Economia, il Territorio e la Finanza MEMOTEF.
    8. Paolo Angelini & Andrea Nobili & Cristina Picillo, 2011. "The Interbank Market after August 2007: What Has Changed, and Why?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(5), pages 923-958, August.
    9. Federico Bassi & Andrea Boitani, 2021. "Monetary and macroprudential policy: The multiplier effects of cooperation," DISCE - Working Papers del Dipartimento di Economia e Finanza def110, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    10. Konstantin Makrelov & Rob Davies & Laurence Harris, 2021. "The impact of higher leverage ratios on the South African economy," Studies in Economics and Econometrics, Taylor & Francis Journals, vol. 45(3), pages 184-207, July.
    11. Martin Hodula, 2019. "Monetary Policy and Shadow Banking: Trapped between a Rock and a Hard Place," Working Papers 2019/5, Czech National Bank.
    12. Eric Monnet, 2014. "Monetary Policy without Interest Rates: Evidence from France's Golden Age (1948 to 1973) Using a Narrative Approach," American Economic Journal: Macroeconomics, American Economic Association, vol. 6(4), pages 137-169, October.
    13. Jean-Christophe Poutineau & Gauthier Vermandel, 2015. "A Primer on Macroprudential Policy," The Journal of Economic Education, Taylor & Francis Journals, vol. 46(1), pages 68-82, March.
    14. Konstantin Makrelov & Channing Arndt & Rob Davies & Laurence Harris, 2018. "Stock-and-flow-consistent macroeconomic model for South Africa," WIDER Working Paper Series wp-2018-7, World Institute for Development Economic Research (UNU-WIDER).
    15. Koutsobinas, Theodore, 2011. "Animal spirits, liquidity-preference and Keynesian behavioural macroeconomics: An intertemporal framework," MPRA Paper 43027, University Library of Munich, Germany.
    16. Dib, Ali & Mendicino, Caterina & Zhang, Yahong, 2013. "Price-level targeting rules and financial shocks: The case of Canada," Economic Modelling, Elsevier, vol. 30(C), pages 941-953.
    17. Kai Lessmann & Matthias Kalkuhl, 2024. "Climate Finance Intermediation: Interest Spread Effects in a Climate Policy Model," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 11(1), pages 213-251.
    18. Nelson, Edward, 2013. "Friedman's monetary economics in practice," Journal of International Money and Finance, Elsevier, vol. 38(C), pages 59-83.
    19. Wojnilower, Joshua, 2018. "On credit and output: Is the supply of credit relevant?," The North American Journal of Economics and Finance, Elsevier, vol. 45(C), pages 38-56.
    20. Oscar Gasanov, 2021. "Five Years of Inflation Targeting Without Economic Growth: What Should Be Changed? The Case of Russia," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(3), pages 162-171, May.

    More about this item

    Keywords

    central bank; credit; crisis; macro prudential policy; monetary policy; risk; financial stability; monetary stability;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wun:journl:tje:v05:y2012:i18:a09. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Romeo Margea (email available below). General contact details of provider: https://edirc.repec.org/data/feuvtro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.