The Interplay between Money Market Development and Changes in Monetary Policy Operations in Small European Countries, 1980–2000

Jens Forssbæck and Lars Oxelheim

No 669, Working Paper Series from Research Institute of Industrial Economics

Abstract: We study the interplay between money market development and changes in monetary policy operating procedures in 11 European countries from c. 1980 up to the launch of EMU. Aspects of money market development such as the size and structure of different market segments, and institutional and regulatory changes, are addressed. We recount and empirically examine the extent of reorientation of monetary policy instruments away from quantitative direct control instruments toward indirect market-based instruments. The process of financial deregulation is uniform across the countries. The path of money market development varies substantially, whereas changes in central bank instruments show both similarities and differences. We hypothesise a relationship between the two processes and provide tentative evidence.

Keywords: Monetary policy operations; Money market; European Union; Deregulation (search for similar items in EconPapers)
JEL-codes: E52 E58 G28 N24 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2006-09-22
New Economics Papers: this item is included in nep-cba, nep-fin, nep-fmk, nep-mac and nep-mon
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Published in Open Market Operations and Financial Markets, Mayes, David, Toporowski, Jan (eds.), 2007, pages 120-152, Routledge.

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0669

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