Monetary Operations: Tools and Techniques for Policy Implementation 2022b

Monetary Operations: Tools and Techniques for Policy Implementation 2022b

Monetary Operations: Tools and Techniques for Policy Implementation

November 7 – 10

Live Content sessions held: 8am–12pm (EST) | 1pm–5pm (GMT) | 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, with time set aside for a workshop on implementing key learnings.

View chair letter.

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

13:0013:30

Course introduction
Course introduction session led by the chair

06:00 - 06:15

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

Advisor in the Directorate of Financial Stability, Regulation and Resolution

Bank of Spain

María J. Nieto is Associate to the Director General, Banking Regulation at Bank of Spain where she has developed different responsibilities in the realm of financial stability and its regulatory framework including crisis management since December 2000. Ms Nieto has been a contributor to the Basel Committee of Banking Supervisors as well as the European Commission, BIS, ECB and OECD. She is author of several articles on banking and regulatory issues that have been published by prestigious journals and member of the Editorial Boards of the Journal of Banking Regulation and the Journal of Financial Regulation and Compliance. She has cooperated as consultant with the IMF and the Federal Reserve Bank of Atlanta and has worked at the ECB, Council of Economic Advisors to the Spanish President, the EBRD and the IMF. Ms Nieto earned a PhD cum laude from the Universidad Complutense de Madrid and a MBA from the University of California Los Angeles.

13:3014:30

Monetary policy in 2022: fighting a nearly forgotten enemy – inflation

13:30 - 14:30

  • 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.

14:3014:45

Break

12:45 - 13:00

14:4515:45

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

14:45 - 15:45

  • 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?
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.

15:4516:00

Break

12:45 - 13:00

16:0017:00

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?
Carlos Cantu

Economist, representative office for the Americas, Monetary economics department

Bank for International Settlements

Carlos Cantú joined the BIS in the spring of 2016. He obtained his MA and PhD in economics from the University of California, Los Angeles. Before obtaining his PhD, he worked for the Bank of Mexico in the Economic Research Department. He is part of the secretariat of the BIS Consultative Group on Innovation and the Digital Economy Technical Task Force on CBDCs.

Building an effective framework for policy implementation

13:0014:00

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
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.

14:0014:15

Break

12:45 - 13:00

14:1515:15

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.

15:1515:45

Networking break

15:30 - 16:00

15:4516:45

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?
Andrew Filardo

Visiting Fellow

Stanford University

Andy is currently a Visiting Fellow at the Hoover Institution, Stanford University. He worked at the BIS from 2002-21 where, most recently, he held the position of Head of Monetary Policy and, prior to that, Head of Economics for Asia and the Pacific. Before joining the BIS, he served on the staff of President Bush’s Council of Economic Advisers, was an Assistant Vice President and Economist at the Federal Reserve Bank of Kansas City, taught as an Adjunct Associate Professor at the University of Chicago Graduate School of Business, was a visitor at the IMF, and has worked with many central banks across the globe during his career. Andy has authored numerous publications in the fields of international monetary policy, macroeconomics, and financial stability. Andy holds a Ph.D. in economics from the University of Chicago.

Emerging risk and opportunities

13:0014:00

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

Freyr Hermannsson is an experienced central banker and has worked with a dozen central banks and United Nations agencies since the turn of the century. He is an independent advisor focusing on sovereign asset and liability management, particularly balance sheet management and central bank policy solvency, reserve management and public debt management. He has hands-on knowledge of monetary and exchange operations, FX markets development, exchange rate regimes, FX regulations (incl. capital controls) and capital account liberalization, central banking recapitalization and related accounting issues.

Mr. Hermannsson initially joined the Central Bank of Iceland in 2000 and after several years in the private sector was drafted back into the central bank in Iceland’s 2008 financial crisis where he served as Head of Treasury. He led international reserves management, implemented central bank open market operations, negotiated government debt transactions, developed capital controls, and worked on crisis prevention and management during and after the crisis of 2008.

A mathematician by education, he holds a M.Sc. from Columbia University in Operation Research and a B.Sc. in Mathematics from the University of Gothenburg, Sweden. He has lectured on the mathematics and economics of financial markets as an Adjunct Lecturer at the Faculty of Economics of the University of Iceland.

14:0014:15

Break

12:45 - 13:00

14:1515:15

Central bank asset purchases: lessons from recent global experience

07:15 - 08:15

  • 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

Former 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. Simon has recently retired, but 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.

15:1515:45

Networking break

15:30 - 16:00

15:4516:45

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
Niko Herrala

Head of monetary policy implementation

Bank of Finland

Niko Herrala works as a Head of Division in the Market Operations Department at the Bank of Finland. He is also a member of ESCB's Working Group on Monetary Policy Implementation.

The future of monetary policy

13:0014:00

US inflation and spillovers to other countries

13:00 - 14:00

  • 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?
Elisa Vilorio

Technical consultant and deputy director of the treasury department

Elisa Vilorio Medina is a Technical Consultant of the Treasury Department of the Central Bank of Dominican Republic. Dr. Vilorio’s tenure responsibilities as Deputy Director of Foreign Reserve management for more than 10 years included the design and execution of the FX reserves portfolio investment strategy, quantitative analysis of risk management and strategic asset allocation. Furthermore, Dr. Vilorio was one of the lead managers of the successful Repurchase Operation of the Brady Bonds of the Central Bank of Dominican Republic in 2017.

Dr. Vilorio holds a PhD in Economics from Florida International University (FIU), a Master of Science in Finance and a post-graduate degree in Risk Management from the IAE Aix en Provence in France and is a Fulbright Alumni. She has presented her Macroeconomic research in different Annual meetings at the American Economic Association (AEA), Southern Economic Association (SEA), Midwest Economic Association (MEA), Eastern Economic Association (EEA), International Atlantic Economic Society (IAES) and International Trade and Finance Association (ITFA).

Also, Dr. Vilorio has participated in different projects with the World Bank under the Reserve Advisory Management (RAMP) program. Furthermore, Dr. Vilorio has published several articles in the Central Banking Journal related to active management of a portfolio of International Reserves and hedging strategies using interest rate futures.

14:0014:15

Break

12:45 - 13:00

14:1515:15

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?
Massimo Rostagno

Director General Monetary Policy

EUROPEAN CENTRAL BANK

15:1515:30

Break

12:45 - 13:00

15:3016:15

Monetary operations closing remarks and delegate action plans

15:30 - 16:15

Concluding session led by the chair
  • 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 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.

Learning outcomes

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

  • Understand the impact rising yields are having on international and domestic markets
  • Assess the implications of CBDCs for monetary policy
  • Gain insights into integrating climate risk with monetary policy
  • Create liquidity forecasts and optimise the operating framework
  • Gain insights 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 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.