Work detail

Fed's and ECB's monetary policy during the crisis - differences and their reasons

Author: Bc. Jan Žáček
Year: 2014 - summer
Leaders: doc. Mgr. Tomáš Holub Ph.D.
Work type: Bachelors
Language: English
Pages: 63
Awards and prizes: B.A. with distinction from the Dean of the Faculty of Social Sciences for an excellent state-final examination performance.
Abstract: This bachelor thesis analyzes the approaches of the Federal Reserve System and the
European Central Bank to monetary policy during the crisis. The main part of this
thesis is devoted to unconventional monetary policy measures conducted during the
crisis. We firstly introduce the respective measures, subsequently compare them and
state reasons which caused di erent behaviour of the Federal Reserve System and the
European Central Bank. This thesis states six main differences and their respective
reasons. First, the fundamental difference is the perspective on unconventional
monetary policy measures in terms of whether they were considered a substitute
or complement to the existing policy instruments. The second signi cant di erence
can be found in the behaviour before the collapse of Lehman Brothers. Third, the
timing of implementation of measures was also distinct. Fourth, the purchases of
government bonds were common for the Federal Reserve System even before the
crisis, while for the European Central Bank it was a novelty. The fifth difference
is in the use of outright purchases versus collateralized lending. The last difference
resides in the attitude toward main interest rates steering, in which the Federal
Reserve System was more aggressive than the European Central Bank. Reasons
which contributed to these distinct approaches are various { mandates of the central
banks, method of liquidity distribution, structure of financial systems and other.


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