Monetary Operations: Tools and Techniques for Policy Implementation

Monetary Operations: Tools and Techniques for Policy Implementation

Monetary Operations: New Tools and Techniques for Policy Implementation

Course Chair: Francesco Papadia, former Director General for Market Operations, European Central Bank

 

Day 1, 10th September - Monetary Policy Operations in the Era of Normalisation 

What next for central bank balance sheets?
Charles Goodhart
, Professor Emeritus, London School of Economics, Financial Market Groups

  • Evolution of the central bank balance sheets as operational tools for policy implementation
  • Key dynamics shaping the balance sheet size and composition
  • Overview of challenges for central banks from advanced and emerging economies
  • Discussion: what principles should determine the approach to the central bank balance sheets at the time of monetary policy normalisation?


Fed and monetary policy normalisation: recent developments, outlook and wider impact
John Weinberg
, Senior Economic and Policy Advisor, Federal Reserve Bank of Richmond

  • State of the art of the Fed’s programme of monetary policy normalisation
  • Overview of strategic challenges in the context of the current economic and political climate
  • Impact and implications for the global financial system
  • Expectations in relation to further steps and policy developments


Climate risk: impact and implications for monetary policy
Andrew Filardo
, Head, Monetary Policy, Bank for International Settlements

  • Climate change as the emerging source of local and systemic instability
  • Impact and implications for monetary policy strategy, conduct and implementation
  • Overview of new roles and responsibilities for central banks in the areas of green finance and ESG
  • Discussion: how are central banks’ tackling climate risk in the delegates’ home jurisdictions?

 

Day 2, 11th September - Dealing with Disruptive Forces

The new toolkit for optimizing monetary policy operations
Francesco Papadia
, former Director General for Market Operations, European Central Bank

  • Evolution of approaches for managing domestic liquidity and monetary policy operations
  • Frameworks for tackling challenges at both strategic and day-to-day level
  • Key features of the modern monetary operations toolkit
  • Case study: monetary operations framework at the European Central Bank


China’s economy and monetary policy: global implications in focus

  • Evolution of China’s economy and monetary policy
  • Implications for capital markets and the global financial system
  • Key risks and opportunities for monetary policy frameworks and strategies in advanced and emerging economies
  • Discussion: what is the impact of geopolitics on monetary policy?


Digital currencies and monetary policy: roles and responsibilities for central banks
Hanna Armelius
, Advisor, Sveriges Riksbank

  • State of the art of Central Bank Digital Currencies (CBDCs) and crypto assets
  • Impact and implications of CBDCs for markets and portfolios
  • Opportunities and risk of CBDCs for monetary policy implementation
  • Discussion: do CBDCs represent a realistic and desirable goal?


The future of unconventional monetary policy
Shigenori Shiratsuka, Director General, Institute for Monetary and Economic Studies, Bank of Japan (invited)

  • Overview of unconventional monetary policy measures applied in response to the changes in economic and financial conditions
  • Examples of frameworks for assessing the effects of these measures
  • Applicability of unconventional measures in the era of monetary policy normalisation
  • Case study: Japanese experience of unconventional monetary policy and its wider implications


International monetary policy spillovers and responses
Ramana Ramaswamy
, Distinguished Academic Visitor, Queen’s College, University of Cambridge and former Senior Economist, International Monetary Fund

  • Examples of monetary policy spillovers from advanced to emerging market economies
  • Overview of measures taken in emerging markets in response to these effects
  • Spillover implications of the Fed monetary policy normalisation
  • Discussion: how do monetary policy spillovers get tackled in the delegates’ home jurisdictions?


Day 3, 12th September - Liquidity Management: Emerging Risks and Opportunities

Dealing with the “evil twin”: quantitative tightening in focus
Kevin Gardiner
, Managing Director, Global Investment Strategist, Rothschild Private Wealth 

  • Overview of nominal and real interest rates evolution
  • Effects and implications of quantitative easing (QE)
  • Assessment of quantitative tightening (QT) as the quantitative easing’s (QE) “evil twin”
  • Discussion: QE and QT in the delegates’ home jurisdictions


Collateral management: an assessment framework
Evangelos Tabakis, Head of Risk Management, Central Bank of the United Arab Emirates; and former Head of Financial Markets and Collateral, European Central Bank (invited)

  • Overview of key collateral management techniques and frameworks
  • Changes in regulation and their impact on collateral quality, availability and central bank eligibility
  • Implications for balance sheets of central banks and other market participants
  • Discussion: what can market players and authorities do about a shortage of high quality liquid assets?


Workshop: delivering accurate and timely liquidity forecasts
Olav Syrstad
, Senior Economist, Norges Bank

  • State of the art of liquidity forecasting tools, methods and techniques
  • Overview of key challenges faced by central banks in today’s volatile markets
  • Examples of frameworks helping to avoid forecasting errors
  • Hands-on activity: stylised forecasting exercise 


Day 4, 13th September - Monetary Policy Post-QE: A User’s Guide

What (not) to say to markets, when and how?
Mika Pösö
, Head of General Secretariat, Bank of Finland

  • The role of communication with markets in monetary policy design and implementation
  • Overview of key signals that market participants are looking for in policy announcements
  • Examples of frameworks and processes ensuring that central banks’ messages are consistent and context-sensitive
  • Hands-on activity: how to communicate in time of market stress or volatility


Monetary policy in 2020: leaning against the wind and beyond
Francesco Papadia
, former Director General for Market Operations, European Central Bank

  • Assessment of dilemmas, conflicts and trade-offs between monetary operations and the financial stability mandate
  • Implications for central banks’ independence and accountability
  • Overview of key factors and dynamics that will shape the framework for monetary policy operations in the years to come
  • Discussion: future of monetary policy in the delegates’ home jurisdictions


Closing remarks and delegate action plans
Concluding session led by the chair, Francesco Papadia

  • Summary of the training course
  • Discussion of the observed trends and case studies 
  • Application of learning points in the delegates’ home organisations
  • Preparation of action points