Monetary Operations: Tools and Techniques for Policy Implementation 2021 main page

Monetary Operations: Tools and Techniques for Policy Implementation

Monetary Operations: Tools and Techniques for Policy Implementation

May 10 - 13

Chair: Francesco Papadia, former director general for market operations, European Central Bank

What are the short and long-term impacts of the monetary policy response to Covid-19? What are the implications of large central bank balance sheets? Is the digitisation of monetary policy being hindered or accelerated by the consequences of the pandemic? How is climate change impacting monetary policy strategy, conduct and implementation? 

These are some of the main challenges facing those working in market operations at central banks in 2021. In addition disruptive forces including climate risk, digital currencies and the Covid-19 crisis are impacting monetary operations in unprecedented ways and impacting emerging economies differently to advanced economies. 

Chaired by market operations expert Francesco Papadia alongside speakers from central banks around the world, this course is designed to equip delegates with the frameworks and approaches to meet the monetary policy operations challenges facing the modern central bank in both emerging and advanced economies. 

Each day will feature three hours of expert-led live content to maximise the opportunity to share and learn. The Course Chair will ensure participants have opportunities to network throughout the programme. 

US timezone: 8am-11am (EDT) |1pm-4pm (BST) | 8pm-11pm (SGT) 

Learning outcomes

At the conclusion of the training, participants will be able to:

  • Understand the strategic challenges to monetary operations in the context of the economic and political climate
  • Assess the implications and opportunities that CBDCs have on monetary policy
  • Tackle the impacts that climate risk has on monetary policy
  • Gain insight in to the Libor transition and the key features of the SOFR framework
  • Create liquidity forecasts and use tools and methods to overcome key challenges of volatile markets

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Francesco Papadia

Former director general for market operations

European Central Bank

Francesco Papadia is chair of primary collateralised securities, chair of the selection panel of the Hellenic Financial Stability Fund, resident fellow of Bruegel and lectures at various universities. Between June 1998 and May 2012 he was director general for market operations at the European Central Bank. Before that he held different positions at Research Department and Foreign Department at the Bank of Italy. Between 1980 and 1983 he was economic advisor at the Directorate General for Economic and Financial Affairs of the European Commission. From 1974 to 1979 he served as economist in the Research Department of the Bank of Italy. He holds a degree in law from the University of Rome and did his postgraduate studies in economics at Istao, Ancona and at the London Business School. He has written numerous articles and books.

Monetary Operations: Tools and Techniques for Policy Implementation Agenda 2021

Dealing with Disruptive Forces

13:0013:15

Course introduction
Course introduction session led by the chair

13:00 - 13:15

  • Introductions and welcome from the chairperson
  • Overview of the training course
  • Discussion of the delegate expectations

13:1513:45

Climate risk: impact and implications for monetary policy

13:15 - 13:45

  • 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?

13:4514:00

First break

13:45 - 14:00

14:0014:45

Fed and monetary policy response to Covid-19: recent developments, outlook and wider impact

14:00 - 14:45

  • Understanding the state of the art of the Fed’s policy response to the economic impact of Covid-19
  • 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

14:4515:00

Second break

14:45 - 15:00

15:0015:45

Digital currencies and monetary policy: implications for monetary policy, central banks and central banking

15:00 - 15:45

  • Taxonomy of Central Bank Digital Currencies (CBDCs), stable coins and crypto assets
  • Impact and implications of CBDCs for markets and portfolios
  • Opportunities and risks of CBDCs for monetary policy implementation
  • Discussion: will Covid-19 speed the transition to digital currencies?

Building an Effective Framework for Policy Implementation

13:0013:45

What next for central bank balance sheets?

13:00 - 13:45

  • Evolution of the central bank balance sheets as operational tools for policy implementation
  • Key dynamics shaping  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?

13:4514:00

First break

13:45 - 14:00

14:0014:45

The new toolkit for optimising monetary policy operations

14:00 - 14:45

  • 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

14:4515:00

Second break

14:45 - 15:00

15:0015:45

International monetary policy spillovers and responses

15:00 - 15:45

  • 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 tightening
  • Discussion: how do monetary policy spillovers get tackled in the delegates’ home jurisdictions?

From Collateral to Liquidity Management: Emerging Risks and Opportunities

13:0013:45

Beyond Libor: implications for central banks and markets

13:00 - 13:45

  • Overview of Libor transition and discontinuation
  • Risks and implications for monetary policy design and implementation
  • Key features of the new SOFR framework
  • Discussion: expectations in delegates’ home jurisdictions

13:4514:00

First break

13:45 - 14:00

14:0014:45

Collateral management: an assessment framework

14:00 - 14:45

  • 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?

14:4515:00

Second break

14:45 - 15:00

15:0015:45

Workshop: delivering accurate and timely liquidity forecasts

15:00 - 15:45

  • 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

The Future of Monetary Policy

13:0013:45

What (not) to say to markets, when and how?

13:00 - 13:45

  • 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

13:4514:00

First break

13:45 - 14:00

14:0014:45

Monetary policy in 2021: leaning against or with the wind?

14:00 - 14:45

  • 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

14:4515:00

Second break

14:45 - 15:00

15:0015:30

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

15:00 - 15:30

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