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Central bank operations in response to the financial turmoil

Central bank operations in response to the financial turmoil

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Published by Jason Henry
CGFS Papers
No 31:
Report submitted by a Study Group established by the Committee
on the Global Financial System
This Study Group was chaired by Francesco Papadia of the
European Central Bank
CGFS Papers
No 31:
Report submitted by a Study Group established by the Committee
on the Global Financial System
This Study Group was chaired by Francesco Papadia of the
European Central Bank

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Published by: Jason Henry on Dec 30, 2011
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11/09/2012

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Committee on the GlobalFinancial System
CGFS Papers
No 31
Central bank operations inresponse to the financialturmoil
Report submitted by a Study Group established by the Committeeon the Global Financial SystemThis Study Group was chaired by Francesco Papadia of theEuropean Central BankJuly 2008JEL Classification numbers: E42, E52, E58
 
 
Copies of publications are available from:Bank for International SettlementsPress & CommunicationsCH 4002 Basel, SwitzerlandE mail: publications@bis.orgFax: +41 61 280 9100 and +41 61 280 8100This publication is available on the BIS website (www.bis.org).©
Bank for International Settlements 2008. All rights reserved. Brief excerpts may be reproduced or translated provided the source is cited.
ISBN 92-9131-769-1 (print)ISBN 92-9197-769-1 (online)
 
 
CGFS - Central bank operations in response to the financial turmoil
iii
 
Preface
In November 2007, the Committee on the Global Financial System (CGFS), in cooperationwith the Markets Committee, convened a Study Group to examine how central banksadapted the ways in which they supplied liquidity in response to the money market tensionsthat emerged in August 2007 and how effective those responses were. This Study Group,chaired by Francesco Papadia (European Central Bank), brought together senior centralbank market operations experts from seven major currency areas. A number of other CGFScentral banks also contributed to the analysis.The first draft of the Study Group report was completed in February 2008. In its March 2008meeting, the CGFS discussed the draft report and endorsed the preliminaryrecommendations identified at that stage. After approval by the G10 Governors, thepreliminary recommendations served as input for the April 2008 Financial Stability Forum(FSF) report to the G7 Finance Ministers and central bank Governors. The draft Study Groupreport, including its recommendations and conclusions, was subsequently revised andupdated in the light of the significant and rapidly evolving developments in March and April2008.The Study Group worked in real time, so to speak. The report was drafted while centralbanks closely monitored market developments and, more or less simultaneously, had torespond to the evolving challenges. Indeed, some of the specific recommendationsdiscussed by the Study Group had already been implemented during the drafting period.Moreover, the report reflects the Study Group’s experience and assessment up to end-April2008, at which time market tensions were still persisting. Central banks, both individually andcollectively in the CGFS and other forums, are continuing to draw lessons from the turmoilabout the operation of their liquidity facilities and to examine how they can be made moreeffective now and in the future. A particular focus of our ongoing investigations in the CGFSis the cross-border provision of liquidity.Donald L KohnChairman, Committee on the Global Financial SystemVice Chairman, Board of Governors of the Federal Reserve System

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