The Role of the International Monetary Fund and the Federal Reserve in Stabilizing Europe

The Role of the International Monetary Fund and the Federal Reserve in Stabilizing Europe PDF

Author: United States. Congress. House. Committee on Financial Services. Subcommittee on Domestic Monetary Policy and Technology

Publisher:

Published: 2010

Total Pages: 88

ISBN-13:

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"Today's hearing is a part of our ongoing effort to examine and understand what can cause a global economic crisis and threaten our economic well-being. Today, we will look at the sovereign debt crisis in many nations, particularly in Europe. We will explore the root causes and potential solutions to the European debt crisis with particular focus on the policy responses made by the Federal Reserve and the International Monetary Fund (IMF) to help stabilize European financial markets."--P. 1.

The International Monetary Fund, the European Central Bank and the Federal Reserve and Their Role in the Economic Crisis

The International Monetary Fund, the European Central Bank and the Federal Reserve and Their Role in the Economic Crisis PDF

Author: Katharina Lurz

Publisher:

Published: 2018-06-30

Total Pages: 24

ISBN-13: 9783668746060

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Seminar paper from the year 2015 in the subject Politics - International Politics - Region: USA, grade: 1,0, University of Bonn, language: English, abstract: This term paper is going to elaborate on the tasks and functions of certain international financial institutions, and subsequently on their role and course of action in the economic crisis. The institutions selected for that end are the International Monetary Fund, the European Central Bank and the Federal Reserve. Interestingly, all of these institutions have different spheres of influence, namely worldwide, Europe and the US, which also responds to the global character of the crisis itself. This suggests a global rescue effort which "transcended national boundaries" (Mihm and Roubini 177). This paper is concerned with the question what significant measures the respective institutions took and whether these actions were consistent with their original mandate and key objectives. For this purpose, each international institution will be examined individually, first according to their function and tasks (in tranquil times), and then with focus on their measures and reactions in the course of the economic crisis.

The Federal Reserve System Purposes and Functions

The Federal Reserve System Purposes and Functions PDF

Author: Board of Governors of the Federal Reserve System

Publisher:

Published: 2002

Total Pages: 0

ISBN-13: 9780894991967

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Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.

Designing a Simple Loss Function for Central Banks

Designing a Simple Loss Function for Central Banks PDF

Author: Davide Debortoli

Publisher: International Monetary Fund

Published: 2017-07-21

Total Pages: 56

ISBN-13: 1484311752

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Yes, it makes a lot of sense. This paper studies how to design simple loss functions for central banks, as parsimonious approximations to social welfare. We show, both analytically and quantitatively, that simple loss functions should feature a high weight on measures of economic activity, sometimes even larger than the weight on inflation. Two main factors drive our result. First, stabilizing economic activity also stabilizes other welfare relevant variables. Second, the estimated model features mitigated inflation distortions due to a low elasticity of substitution between monopolistic goods and a low interest rate sensitivity of demand. The result holds up in the presence of measurement errors, with large shocks that generate a trade-off between stabilizing inflation and resource utilization, and also when ensuring a low probability of hitting the zero lower bound on interest rates.

Evolution of Bilateral Swap Lines

Evolution of Bilateral Swap Lines PDF

Author: Michael Perks

Publisher: International Monetary Fund

Published: 2021-08-06

Total Pages: 40

ISBN-13: 1513590138

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This paper makes contributions to the study of bilateral swap lines (BSLs). First, this paper fills a BSL information gap by constructing a comprehensive database of BSLs based on publicly available information, including after the onset of the COVID-19 pandemic. Second, the paper provides the results of regression analysis exploring several empirical questions that were not covered in previous studies. The paper documents the evolution of BSLs into an important part of the Global Financial Safety Net (GFSN), with some helping to stabilize financial market during both the Global Financial Crisis (GFC) and the COVID-19 pandemic. Analysis suggests that countries on the recipient side of BSLs are more likely to sign and renew BSLs designed to alleviate balance of payments needs as their external position weakens. U.S. Federal Reserve BSLs appear to have been effective at stabilizing financial market conditions during the COVID-19 pandemic.

Europe and Global Imbalances

Europe and Global Imbalances PDF

Author: Philip R. Lane

Publisher: International Monetary Fund

Published: 2007-06

Total Pages: 66

ISBN-13:

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Although Europe in the aggregate is a not a major contributor to global current account imbalances, its trade and financial linkages with the rest of the world mean that it will still be affected by a shift in the current configuration of external deficits and surpluses. We assess the macroeconomic impact on Europe of global current account adjustment under alternative scenarios, emphasizing both trade and financial channels. Finally, we consider heterogeneous exposure across individual European economies to external adjustment shocks.

France and the Breakdown of the Bretton Woods International Monetary System

France and the Breakdown of the Bretton Woods International Monetary System PDF

Author: Ms.Dominique Simard

Publisher: International Monetary Fund

Published: 1994-10-01

Total Pages: 58

ISBN-13: 1451935366

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The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.

The Chicago Plan Revisited

The Chicago Plan Revisited PDF

Author: Mr.Jaromir Benes

Publisher: International Monetary Fund

Published: 2012-08-01

Total Pages: 71

ISBN-13: 1475505523

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At the height of the Great Depression a number of leading U.S. economists advanced a proposal for monetary reform that became known as the Chicago Plan. It envisaged the separation of the monetary and credit functions of the banking system, by requiring 100% reserve backing for deposits. Irving Fisher (1936) claimed the following advantages for this plan: (1) Much better control of a major source of business cycle fluctuations, sudden increases and contractions of bank credit and of the supply of bank-created money. (2) Complete elimination of bank runs. (3) Dramatic reduction of the (net) public debt. (4) Dramatic reduction of private debt, as money creation no longer requires simultaneous debt creation. We study these claims by embedding a comprehensive and carefully calibrated model of the banking system in a DSGE model of the U.S. economy. We find support for all four of Fisher's claims. Furthermore, output gains approach 10 percent, and steady state inflation can drop to zero without posing problems for the conduct of monetary policy.

U.S. Monetary Policy Normalization and Global Interest Rates

U.S. Monetary Policy Normalization and Global Interest Rates PDF

Author: Carlos Caceres

Publisher: International Monetary Fund

Published: 2016-09-29

Total Pages: 46

ISBN-13: 1475543069

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As the Federal Reserve continues to normalize its monetary policy, this paper studies the impact of U.S. interest rates on rates in other countries. We find a modest but nontrivial pass-through from U.S. to domestic short-term interest rates on average. We show that, to a large extent, this comovement reflects synchronized business cycles. However, there is important heterogeneity across countries, and we find evidence of limited monetary autonomy in some cases. The co-movement of longer term interest rates is larger and more pervasive. We distinguish between U.S. interest rate movements that surprise markets versus those that are anticipated, and find that most countries receive greater spillovers from the former. We also distinguish between movements in the U.S. term premium and the expected path of risk-free rates, concluding that countries respond differently to these shocks. Finally, we explore the determinants of monetary autonomy and find strong evidence for the role of exchange rate flexibility, capital account openness, but also for other factors, such as dollarization of financial system liabilities, and the credibility of fiscal and monetary policy.

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