NON-TRADITIONAL METHODS OF MONETARY POLICY: THEORETICAL ASPECTS AND PRACTICE OF APPLICATION IN EU AND THE USA
Journal Title: Ринкова економіка: сучасна теорія і практика управління - Year 2017, Vol 16, Issue 3
Abstract
The purpose of the article is to analyze the peculiarities of the use of non-traditional monetary policy methods in the USA and the EU and determine their implications for national economies. The latest global financial crisis have had a significant impact on the ability of central banks to regulate the volume of liquidity of the interbank market, and when the banks of the leading countries of the world, using their traditional methods, have appeared in the «trap of liquidity», the need for the application of new methods has become necessary. That is why the US Federal Reserve, then the European Central Bank of the European Union, began to apply completely different regulatory methods, which later became known as “non-traditional monetary policy” in the economic literature. An example of using non-traditional methods is the Federal Reserve’s policy. One of the methods that have been used is signaling methods, in particular Forward Guidance, which consists of the promises of the central bank for its future actions. This method is necessary because the public should trust management structures. The Federal Reserve also applied such a method as credit incentives. Under this method, it is understood that the Fed is directly stimulating the problem segments of the financial market through the purchase of debt securities of corporations in the United States. At that, many programs were conducted. Unlike the Fed, the European Central Bank has used the indirect stimulus of the banking system. Different programs have also been used to inflate financial resources into the banking system by reducing the security requirements for obtaining financing. Another feature of the ECB is negative interest rates. Today, these methods are actively used by many countries of the world.
Authors and Affiliations
S. A. Yakubovsky, H. S. Alekseevskaya
Keywords
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