Interactions of Derivatives with Central Bank Issues

Roxana Angela Calistru ()
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Roxana Angela Calistru: „Petre Andrei” University of Iasi, Faculty of Economics

Ovidius University Annals, Economic Sciences Series, 2012, vol. XII, issue 1, 1300-1305

Abstract: Derivatives are an important part of the process of financial innovation that swept global markets. The growth of derivatives has so many implications on the economy in general and for the environment in which the monetary policy operates. This paper examines the impact that presence of derivatives markets has on the monetary policy transmission mechanism. The effects of derivatives markets is analyzed independently for each of the main channels of monetary policy transmission: interest rates, exchange rates and credit. The conclusion of this paper is that derivatives have a monetary nature that has to be recognized by central banks and included in its monetary targets.

Keywords: derivatives; monetary policy; central bank (search for similar items in EconPapers)
JEL-codes: E52 E58 G15 G32 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:ovi:oviste:v:xii:y:2012:i:12:p:1300-1305

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