【教學(xué)課件】貨幣金融學(xué)7版英文課件-17-大學(xué)課件

【教學(xué)課件】貨幣金融學(xué)7版英文課件--17-大學(xué)課件Chapter17ToolsofMonetaryPolicy?2005PearsonEducationCanadaInc.OverviewSofarwederivedamultiplicativerelationbetweenMandMBM=m

MBanddiscussedthreemonetarypolicytoolsthattheBankofCanadacanusetomanipulateiandM.ThesetoolsareopenmarketoperationsBankofCanadaadvances,andgovernmentdepositshiftingInrecentyears,however,theBankconductspolicybysettinganoperatingbandfortheovernightinterestrateior

andtargetingioratthemidpointoftheband.Indoingso,theBankpermitsMtodowhatevernecessarytokeepiorontarget.3TheRoleofMoneyBeforewegoon,wehavetoclearupapotentialconfusion:AlthoughtheBankofCanadacancontrolbothiandM,itwouldbewrongtoviewiandMasdistinctpolicyinstruments.ThereasonisthatagivenipolicyhastobesupportedbyagivenMpolicy.Thatis,theBankinfluencesibyadjustingM.Toputitdifferently,iisthepriceofMandtheBankaffectsthepriceofM(thatis,theinterestrate)bycontrollingthequantityofmoney.Withthisinmind,let’sdiscusstheinstitutionalframeworkwithinwhichtheBankconductsmonetarypolicy.4TheLargeValueTransferSystem,LVTSTheLVTS(introducedonFebruary4,1999)isanelectronic,real-timenetsettlementnetwork,designedtoprovideimmediatefinalityandsettlementtotime-criticaltransactionsLVTSparticipantsknowinrealtimetheirlarge-value,wholesaletransactions(over$50,000).Althoughthesetransactionsaccountforlessthan1%ofthetotalnumberoftransactions,theyaccountforabout94%ofthevalueoftransactionsinCanadaTheLVTSusesmultilateralnetting—onlythenetcreditordebitpositionofeachparticipantvis-à-visallotherparticipantsiscalculatedforsettlement

5LVTSParticipantsAsofNovember2002,inadditiontotheBankofCanada,therewere13LVTSparticipants---membersoftheCPAwhoparticipateintheLVTSandmaintainasettlementaccountattheBankofCanada.Theseare:BigSix,AlbertaTreasuryBranches,BankofAmericaCanada,BanqueNationaledeParisCanada,LaCaissecentraleDesjardinsduQuébec,CreditUnionCentralofCanada,HSBCBankCanada,andtheLaurentianBankofCanada.6SystemicRiskTheLVTShasbeenputinplacetoeliminatesystemicrisk.Infact,participantscanmakeapaymentonlyiftheyhavepositivesettlementbalancesintheiraccountswiththeBankofCanada,postedcollateral(suchasT-billsandbonds),orexplicitlinesofcreditwithotherLVTSparticipants7Real-TimeSettlementSystemsinOtherCountriesCountry

YearintroducedU.S. (Fedwire) 1918Sweden 1986GermanyandSwitzerland 1987Japan 1988Italy 1989Belgium andU.K. 1996France,HongKong,andNL 1997TheLVTShasbeenputinplaceinordertoeliminatesystemicrisk—therisktotheentirepaymentssystemduetotheinabilityofonebanktofulfillitspaymentobligationsinatimelyfashion.Of,courseitisnotjustCanadathatisconcernedaboutsystemicrisk.8Non-LVTSTransactions

Thesearenon-LVTS(paper-based)paymentitems,suchaschequesTheseitemsareclearedthroughtheAutomatedClearingSettlementSystem(ACSS),anelectronicpaymentssystemalsooperatedbytheCPATheACSSaggregatesinterbankpaymentsandcalculatesthenetamountstobetransferredfromandtoeachparticipant'ssettlementaccountwiththeBankofCanada9DirectandIndirectClearersDirectClearers:ThesubsetofLVTSparticipantswhoparticipatedirectlyintheACSSandareknownasdirectclearers

IndirectClearers:Thesearethedeposit-takingfinancialinstitutionsthataremembersoftheCPAbutdonothaveaclearingaccountwiththeBankofCanada.Indirectclearersholddepositsindirectclearersinexchangeforavarietyofservices,includingchequeclearing,foreignexchangetransactions,andhelpwithsecuritiespurchases10TheOperatingBandof50BasisPointsfortheOvernightInterestRateTheupperlimitdefinesthebankrate—theratetheBankchargesLVTSparticipantsthatrequireanoverdraftloantocovernegativesettlementbalancesThelowerlimitistheratetheBankpaystoLVTSparticipantswithpositivesettlementbalances11TheBank’sStandingLiquidityFacilitiesAttheendofeachday,eachLVTSparticipantmustbringitssettlementbalancewiththeBankclosetozero.TheBankthereforestandsready(wecallthisstandingliquidityfacilities)toprovideorabsorbliquiditywithanovernightdurationtoparticipantsfacingunforeseenliquidityshocks.TheinitiativeisonthesideoftheLVTSparticipant.AparticipantmayusetheBank’slendingfacilitytoobtain(againsteligiblecollateral)overnightliquidityincaseofashortage,oritmayusethedepositfacilitytomakedepositsincaseofexcessliquidity.12Pre-settlementTrading

ParticipantscanreducethecostsofeitherpositiveornegativepositionsbytradingwitheachotherintheLVTSpre-settlementperiodattheendoftheday(6:00-6:30p.m.).Infact,thetypicalbid-askspreadonovernightfundsintheinterbankmarkethasbeenlessthan1/8%,muchlessthanthe50basispointsonLVTS.Hence,participantscanadjustpositionswitheachotherintheovernightmarketatabetterreturnthancanbeachievedattheBank’sstandingfacilities.13TheMarketTimetable14TheBank’sImplementationoftheOperatingBandforiorIfior

towardstheupperlimit,thentheBankwilllendatibtoputaceilingonior

Ifior

towardsthelowerlimit,thentheBankwillacceptdepositsatibless50basispoints,toputaflooronior

15SupplyandDemandforSettlementBalancesandOvernightInterestRate,iorTheequilibriumiorisindeterminateandcouldbeanywherewithinthe50-basis-pointband.ThismeansthattheactualiorwillbesomewhatdifferentfromthetargetiorindicatedatthestartofthebankingdaybytheBank.16TheBank’sCurrentApproachtoMonetaryPolicyInFebruary1991,theBank’sgovernorandtheministeroffinanceannouncedaseriesofdeclining

targets.Thetargetswere3%bytheendof1992,fallingto2%bytheendof1995,toremainwithinarangeof1%-3%thereafter.The1%-3%targetrangefor

wasrenewedinDecember1995,inearly1998,andagaininMay2001,toapplyuntiltheendof2006.ThegoaloftheBank’scurrentpolicyistokeep

atthemidpointofthe

targetrange,2%.17HowtheBankKeeps

FromFallingBelowtheTargetRangeTheBankexpectstheeconomytoslowdownandwishestoeasemonetaryconditions.Itlowerstheoperatingbandforior,therebyencouragingbankstoborrowReitherfromeachotheratiororfromtheBankatibThe

iniandEleadtoan

inM,AD,andP,therebypreventing

fromfallingbelowthetargetrange.18HowtheBankKeeps

FromMovingAbovetheTargetRangeTheBankexpectstheeconomytobeexceedingitscapacityinthefutureandwishestoslowitdown.Itraisestheoperatingbandforiorinordertopreventinflationarypressuresfrombuilding.The

iniandEleadtoan

inM,AD,andP,therebypreventing

frommovingabovethetargetrange.19TheBank’sInfluenceonLong-TermInterestRatesBychangingtheoperatingbandforiortheBanksendsasignalregardingthedirectionthatitwouldlikeiandMtotake.AriseinthebandandthusibisasignalthattheBankwouldliketosee

iand

Mintheeconomy.AfallinthebandisasignalthattheBankwouldlike

iand

M.However,theBank’sdirectinfluenceonlong-termratesdiminishesasthetimeperiod

.Long-termratescanbeeitherhigherorlowerthanshort-termratesdependingonexpectationsabout

andthelevelofshort-termratesinthefuture,therelativebalancebetweenthedemandforandsupplyofloanablefunds,thelevelofiintheU.S.,andtherelativestanceofmonetarypoliciesinthetwocountries.20OpenMarketOperationsTwoTypes1. Dynamic: MeanttochangeMB2. Defensive: MeanttooffsetotherfactorsaffectingMBAdvantagesofOpenMarketOperations1. Bankhascompletecontrol2. Flexibleandprecise3. EasilyreversedImplementedquickly21SPRAsandSRAsOvertheyears,theBankintroducedadditionaltoolsinitsconductofmonetarypolicy.1. In1985,theBankintroducedrepos,whichinCanadaareknownasSpecialPurchaseandResaleAgreements(SPRAs)In1986,theBankintroducedreverserepos,knowninCanadaasSaleandRepurchaseAgreements(SRAs)By1994,theBankstoppedconductingopenmarketoperationsingovernmentofCanadaT-billsandbondsanditsmostcommonoperationssincethenhavebeenrepurchasetransactions,eitherSPRAsofSRAs.SPRAsandSRAs,areconductedwithprimarydealers(formerlyknownasjobbers)---theBigSixandthemajorinvestmentdealers.22TheBank’sUseofSPRAstoReinforcetheTargetiorIfovernightfundsaretradedataratehigherthanthetargetior,theBankentersintoSPRAsatapricethatworksouttothetargetior.BankofCanadaAssets LiabilitiesSPRAs +100 SettlementBalances+100DirectClearersAssets LiabilitiesSettlementBalances+100 SPRAs +100Hence,SPRAsrelieveundesiredupwardpressureonior

23TheBank’sUseofSRAstoReinforcetheTargetiorIfovernightfundsaretradedataratebelowthetargetrate,theBankentersintoSRAs,atapricethatworksouttothetargetior

BankofCanadaAssets Liabilities SettlementBalances-100 SRAs+100DirectClearersAssets LiabilitiesSettlementBalances-100 SRAs +100Hence,SRAsalleviateundesireddownwardpressureon

ior

24BankofCanadaLending(Advances)TwoTypes1. StandingLiquidityFacility,toreinforcetheoperatingbandforior2. LastResortLendingLenderofLastResortFunction1. Topreventbankingpanics CDICfundnotbigenough Exles:CanadianCommercialBankandNorthlandBank2. Topreventnonbankfinancialpanics Exles:1987‘BlackMonday’stockmarketcrashAnnouncementEffect1. Problem:Falsesignals25BankofCanadaAdvancestoMembersoftheCPA26LendingPolicyAdvantages1. LenderofLastResortRoleDisadvantages1. Confusioninterpretingbankratechanges2. Fluctuationsinadvancescauseunintendedfluctuationsinmoneysupply3. NotfullycontrolledbyBank27GovernmentDepositShiftingPriortotheintroductionoftheLVTS,themanagementofsettlementbalances(cashsetting)wasthemainmechanismbywhichtheBankofCanadaimplementedmonetarypolicy.Inparticular,usingdrawdowns(transfersofgovernmentdepositsfromthedirectclearerstotheBankofCanada)andredeposits(transfersofgovernmentdepositsfromtheBankofCanadatothedirectclearers),theBankwasessentiallyimplementingitstargetbandfortheovernightinterestrate.IntheLVTSenvironment,however,theBankusestwice-dailyauctionsofgovernmenttermdeposits(thefirstat9:15a.m.andthesecondat4:15p.m.)toeffecttheshiftingofgovernmentfundsandneutralizecertaingovernmentflows.28NeutralizingaNetGovernmentReceiptConsideranetgovernmentreceiptof$100(i.e.,thegovernment'sreceiptsfromthepublicexceeditspaymentstothepublicby$100).Topreventa

insettlementbalancesandan

inior,theBankneutralizesthenetgovernmentreceiptbymorning(9:15a.m.)andafternoon(4:00p.m.)auctionsofgovernmenttermdeposits,asfollows:BankofCanadaAssets Liabilities GovernmentDeposits-100 SettlementBalances+100DirectClearersAssets LiabilitiesSettlementBalances+100 GovernmentDeposits+10029NeutralizingaNetGovernmentDisbursementIftherewereanetgovernmentdisbursementof$100(i.e.,thegovernment'spaymentstothepublicexceeditsreceiptsfromthepublicby$100),thensettlementbalanceswould

bythesameamount.Topreventa

inior,theBankneutralizesthenetgovernmentdisbursementbyatransferof$100fromthegovernment'saccountsattheLVTSparticipantstothegovernment'saccountattheBank:BankofCanadaAssets Liabilities GovernmentDeposits+100 SettlementBalances-100DirectClearersAssets LiabilitiesSettlementBalances-100 GovernmentDeposits-10030SwapsWiththeExchangeFundAccount(EFA)TheBankusuallybringsontoitsbalancesheetEFAassetstobackitsliabilities.Itdoesso,byarrangingaswapwiththeEFA.IftheBanktemporarilybuys$100ofFXfromtheEFA,then:BankofCanadaAssets LiabilitiesForeignexchange+100 GovernmentDeposits+100GovernmentofCanadaAssets LiabilitiesEFA-100 DepositsattheBank+100GovernmentdepositsattheBank

andnowcanbetransferredtobanksto

settlementbalances.31AnExleofMonetaryControlSupposethattheoperatingbandis4.5%to5%andtheBankwishestotightenpolicybyraisingthebandby25basispointsInoneoftheeightfixeddaysforannouncingchangestothebandforior,theBankannounces,at9:00a.m.,thatitisadjustingthebandupfrom4.5%to5%to4.75%to5.25%Fromthisannouncement,LVTSparticipantsknowthattheibshiftsfrom5%to5.25%