Monetary Policy Operations and the Financial System

Ulrich Bindseil, Director General Market Operations, European Central Bank

After his studies, Ulrich Bindseil joined the Deutsche Bundesbank's economics department in 1994. In 1997, he moved on to the European Monetary Institute and to the European Central bank in 1998. There, he was subsequently responsible for the Liquidity Management Section, the Risk Management Division, and finally for the Directorate General Market Operations (since 2012). He has been a lecturer and visiting professor at the Technical University of Berlin since 2008 and has published in the areas of central bank market operations, risk management, and European governance.

Introduction and Overview
Part I: Monetary Policy Operations in Normal Times
1. Basic Terminology and the Relationship to Monetary Macroeconomics
2. Representing Monetary Policy Operations in Financial Accounts
3. Operational Target of Monetary Policy
4. Three Basic Approaches to Monetary Policy Implementation
5. Several Liquidity Shocks, Averaging, and the Martingale Property of Overnight Rates
6. Standing Facilities and the Interest Rate Corridor
7. Open Market Operations in Normal Times
8. Reserve Requirements
9. Collateral
10. Optimal Monetary Policy Operations in Normal Times
Part II: Monetary Policy in Times of Crises
11. The Mechanics of Liquidity Crises
12. The Role of Collateral Availability for Monetary Policy
13. Open Market Operations and Standing Facilities
14. The Central Bank as Lender of Last Resort (LOLR)
15. LOLR and Central Bank Risk Taking
16. LOLR, Moral Hazard, and Incentives
17. The International Lender of Last Resort
18. Optimal Monetary Policy Implementation in Crisis Times