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Market functioning and central bank policy

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  • Bank for International Settlements

Abstract

The papers in this volume were presented and discussed at the Autumn Central Bank Economists' Meeting held at the BIS on 15-16 October 2001. The meeting focused on recent changes in market functioning and their impact on central bank policy. A number of structural developments seem to have had a significant influence on the functioning of financial markets. The most important of these developments are the introduction of the euro, the spread of electronic trading, changes in the constellation and behaviour of market participants and falling supplies of government debt. There is some evidence that such structural changes resulted in shifts in liquidity among different market segments and, moreover, that liquidity is less robust than in the past. The process of price formation and the information conveyed by prices also appears to have been affected. This poses various challenges for central bank policy, including how best to gauge market expectations and conduct monetary policy operations.

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  • Bank for International Settlements, 2002. "Market functioning and central bank policy," BIS Papers, Bank for International Settlements, number 12.
    • Handle: RePEc:bis:bisbps:12
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    References listed on IDEAS

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    Cited by:

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    2. Bastidon, Cécile & Gilles, Philippe & Huchet, Nicolas, 2008. "The international lender of last resort and selective bail-out," Emerging Markets Review, Elsevier, vol. 9(2), pages 144-152, June.
    3. Klein, Arne C. & Pliszka, Kamil, 2018. "The time-varying impact of systematic risk factors on corporate bond spreads," Discussion Papers 14/2018, Deutsche Bundesbank.
    4. Müller, Alexander & Paulick, Jan, 2020. ""The devil is in the details, but so is salvation": Different approachesin money market measurement," Discussion Papers 66/2020, Deutsche Bundesbank.
    5. Mr. Jorge A Chan-Lau, 2003. "Anticipating Credit Events Using Credit Default Swaps, with An Application to Sovereign Debt Crises," IMF Working Papers 2003/106, International Monetary Fund.

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