Central Banks and Monetary Policy Flashcards

Flashcards about Central Banks and the Conduct of Monetary Policy.

Sveriges Riksbank (Bank of Sweden)

Established in 1668, it is the oldest central bank in the world.

Bank of England (BoE) - 1694

Marks the de facto origin of central banking and served as the archetype for central banks in Europe.

European Central Bank (ECB)

Came into existence on June 1, 1998, to handle transitional issues for nations comprising the Eurozone.

Euro area or Eurozone

Economic and monetary union of EU member states that have adopted the euro.

Eurosystem

Comprises the ECB and the National Central Banks (NCBs) of EU member states that have adopted the euro.

Governing Council of the ECB

Chief decision-making body of the ECB responsible for formulating monetary policy.

Executive Board of the ECB

Responsible for the day-to-day operations and management of the ECB and the Eurosystem.

General Council of the ECB

Encourages cooperation between the NCBs of the EU.

Brexit

Refers to the United Kingdom's intended withdrawal from the EU following the June 23, 2016 referendum.

Hard Brexit

One possible outcome of Brexit where the UK gives up full access to the single market.

Soft Brexit

One possible outcome of Brexit where the UK's relationship with the EU remains close to existing arrangements.

Federal Reserve System (The Fed)

One of the largest and most influential central banks in the world. It is privately owned by member banks but operates independently of the U.S. government.

Federal Reserve Board of Governors (FRB)

Assumes regulatory and supervisory responsibilities over member banks within the Federal Reserve System.

Federal Open Market Committee (FOMC)

Decides on interest rates and monetary policy eight times a year within the Federal Reserve System.

Emerging Market Economies (EMEs)

Fast-growing, export-oriented economies in Asia, Latin America, and Eastern Europe with rapidly maturing financial markets and banking sectors.

Financial Inclusion Policies

Policies used by central banks of EMEs to enhance credit flow to productive industries and provide financial services to underbanked sectors.

Goal Independence

Insulates the central bank from political influence in defining monetary policy objectives.

Instrument Independence

The ability of the central bank to freely implement policy instruments to meet its monetary goals.

Political Business Cycle

Results from political pressure to boost output in the short run, leading to expansionary monetary policies before elections and subsequent reversals.

Quantitative Easing

A monetary policy where a central bank creates new money electronically to buy financial assets from businesses.