Monetary Operations: Tools and Techniques for Policy Implementation 2022a

Monetary Operations: Tools and Techniques for Policy Implementation

Monetary Operations: Tools and Techniques for Policy Implementation

May 23 – 26

Live Content sessions held: 9am–1pm (EDT) | 2pm–6pm (BST) | 9pm–1am (SGT) 

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

  • How are central banks preparing for spillover effects from rising yields?
  • How is climate change impacting monetary policy strategy, conduct and implementation?
  • How will digital currencies impact monetary policy?

These are some of the main challenges facing those working in monetary operations in 2022.

The key in uncertain markets is to manage expectations: internally and externally, among markets and stakeholders. Yet the fast-paced nature of financial markets renders this communication far from straightforward.

This course is designed to equip central bankers to meet these challenges. Each day will feature three hours of expert-led Live Content to maximise the opportunity to share and learn. The chair will ensure participants have opportunities to network throughout the course, culminating in a workshop on practical implementation.

Read the letter from our course chair.

Agenda

Two weeks prior to your training course you will be emailed access to our content hub with course materials, including a trial to Central Banking if you are not already subscribed. There will be a combination of articles, reports and presentations that will contribute to two hours of preparation time for the live content. Presentations for the sessions will also be held here subject to the speaker approval.

Dealing with disruptive forces

14:0014:30

Course introduction
Course introduction session led by the chair

14:00 - 14:30

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

14:3015:30

Monetary policy in 2022: leaning against or with the wind?

14:30 - 15:30

  • 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
Francesco Papadia

former director general for market operations

European Central Bank

Francesco Papadia is chair of Prime 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 of Banca d'Italia. 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 Banca d'Italia. Francesco Papadia holds a degree in Law from the University of Rome. He did his postgraduate studies in Economics at Istao, Ancona and at the London Business School. He has published numerous articles and books.

15:3015:45

Break

15:30 - 15:45

15:4516:45

Climate risk and the ESG agenda: impact and implications for central banks

15:45 - 16:45

  • Climate change as the emerging source of local and systemic instability
  • The context 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?
Audun Grønn

Former special advisor to the governor

Norges Bank

Born 1953. Mr. Grønn holds a graduate degree in economics (cand.oecon. 1979) from the University of Oslo. Work experience since 1980 includes various positions at Norges Bank, including Director of International Department, Director of Statistics Department, and Special Advisor to the Governor. Mr. Grønn spent altogether eight years at IMF’s Executive Board in Washington DC, as Senior Advisor (1989-1992), Alternate Executive Director (2011-2013) and Executive Director (2013-2016), as well as one year at the ECB in Frankfurt as national central bank expert (2005-2006). He retired from his position at Norges Bank in July 2021, but continues as a consultant on a part-time basis.

16:4517:00

Break

16:45 - 17:00

17:0018:00

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

17:00 - 18:00

  • 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?
Mohammad Davoodalhosseini

Principal researcher

Bank of Canada

Currently a Principal Researcher at the Bank of Canada, Mohammad joined the Bank as a Senior Economist after he received his Ph.D. in Economics from the Pennsylvania State University in 2015. Prior to that, he received his B.Sc. in Electrical Engineering and M.Sc. in Economics from Sharif University of Technology in 2007 and 2009, respectively.

His research interests can be classified into two broad categories: monetary economics and search theory. On monetary economics, he studies new developments in the field of electronic money and payments and explores how introducing a central bank digital currency (CBDC) can affect the implementation and transmission of monetary policy as well as the efficiency and stability of financial system. On search theory, he has explored the role of information asymmetries in markets with search frictions, with applications to inter-bank, labor and over-the-counter markets. His work has been published in academic journals such as Journal of Economic Theory, International Economic Review and Journal of Economic Dynamics and Control.

Building an effective framework for policy implementation

14:0015:00

The new toolkit for optimising monetary policy operations

14:00 - 15:00

  • 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
Francesco Papadia

former director general for market operations

European Central Bank

Francesco Papadia is chair of Prime 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 of Banca d'Italia. 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 Banca d'Italia. Francesco Papadia holds a degree in Law from the University of Rome. He did his postgraduate studies in Economics at Istao, Ancona and at the London Business School. He has published numerous articles and books.

15:0015:15

Break

15:00 - 15:15

15:1516:15

Liquidity management in different regimes

15:15 - 16:15

  • Liquidity management and exchange rate regime: different means and different goals
  • Corridor vs. floor systems: implications for liquidity management and forecasting
  • Market volatility and the regulatory demand for liquidity
  • Liquidity forecasting tools and techniques
Miklos Vari

Economist

Banque de France

Miklos Vari is currently a Research Economist in the Bank of France monetary policy division, and a consultant for the IMF monetary and capital market department. He was previously an analyst in the ECB’s Directorate-General of market operations and an Economist at the International Monetary Fund. He has written policy papers and published academic articles in leading economics and finance economic journals on the impact of central bank’s market interventions. Miklos hold a PhD from the Paris School of Economics.

16:1516:45

Networking break
An opportunity to share experiences with your fellow participants.

16:15 - 16:45

16:4517:45

International monetary policy spillovers and responses

16:45 - 17:45

  • 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?
Ardian Fullani

Former governor

Bank of Albania

Emerging risks and opportunities

14:0015:00

The balancing act of policy solvency

14:00 - 15:00

  • The concept of “solvency” for central banks
  • Consequences of financial weakness
  • Distribution mechanisms and recapitalization
  • Assessing capital adequacy – a forward looking approach
Freyr Hermannsson

Former head of treasury

Former Central Bank of Iceland

15:0015:15

Break

15:00 - 15:15

15:1516:15

Central bank asset purchases: lessons from recent global experience

15:15 - 16:15

  • Motivations for launching asset purchase programmes
  • Key components of programmes and realistic goals
  • Risk and opportunities, in particular fiscal dominance and debt monetisation
  • Key principles for central banks going forward
Simon Gray

Regional Advisor for Africa, the Middle East and Central Asia

International Monetary Fund

Simon Gray worked at the Bank of England for some 27 years before joining the IMF in 2007. Over the past 25 years he has worked with central banks around the globe, predominantly on monetary operations framework and FX issues. He has written widely on these topics, both while in the Bank of England’s CCBS, and at the IMF, including most recently an IMF Working Paper on unifying exchange rates in countries where parallel exchange rate markets have emerged; and an IMF Departmental Paper on central bank asset purchases. Simon has also worked on a number of FSAPs, most recently leading the FSAP for China in 2017.

16:1516:45

Networking break
An opportunity to share experiences with your fellow participants.

16:15 - 16:45

16:4517:45

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

16:45 - 17:45

  • The role of communication with markets in monetary policy design and implementation
  • Forward guidance as a policy tool
  • Examples of frameworks and processes ensuring that central banks’ messages are consistent and context-sensitive
  • Practical examples: how to communicate in time of market stress or volatility
Aleksi Paavola

Bank of Finland

Aleksi Paavola works as a Market Analyst at the Bank of Finland, focusing mostly on financial market analysis and design and implementation of different monetary policy measures. He has worked in various positions at the Bank of Finland since 2013. He is currently finishing a PhD in Economics at Aalto University and holds a MSc Economics from University College London and a Bachelor’s degree in Economics from the University of Helsinki.

The future of monetary policy

15:0016:00

US inflation and spillovers to other countries

14:00 - 15:00

  • Recent developments on US inflation
  • What is an appropriate measure of core inflation?
  • Higher inflation in the core countries and tighter monetary policy could have spillovers to other economies
  • How to measure spillovers? Could macroeconomic policies in the core have microeconomic implications?
Prachi Mishra

chief, systemic issues division

International Monetary Fund

16:0017:00

What next for central bank balance sheets?

15:15 - 16:15

  • Quantitative easing: a remedy for liquidity problems
  • Benefits and drawback of the shift to a floor system of money market operations
  • Key components of quantitative easing as a generalised expansionary policy
  • Discussion: the future of central bank balance sheets and money market operations
Charles Goodhart

Professor Emeritus

London School of Economics, Financial Market Groups

17:0017:30

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

16:30 - 17:15

  • 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
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.

Learning outcomes

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

  • Understand the impact rising yields will have on international and domestic markets
  • Assess the implications and opportunities that CBDCs have on monetary policy
  • Tackle the impacts that climate risk has on monetary policy
  • Create liquidity forecasts and optimise the operating framework
  • Gain insight into new tools and techniques for managing liquidity

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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.