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The Single Monetary Policy and Its Decentralised Implementation: An assessment. CEPS Policy Insights No 2017/36, September 2017

Gros, Daniel. (2017) The Single Monetary Policy and Its Decentralised Implementation: An assessment. CEPS Policy Insights No 2017/36, September 2017. [Policy Paper]

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    Abstract

    The statutes of the European Central Bank (ECB) stipulate that it should have recourse to national central banks (NCBs) to carry out monetary policy operations. Such a structure would not be a problem if these operations were all identical across member states and if the resulting profits and losses were shared. But this is not the case today. In this sense, the euro area no longer has a ‘single’ monetary policy. There is little one can do about this situation, except to wait until the government purchase programme ends and is then reversed. However, two steps could be undertaken already now: i) the granting of emergency liquidity assistance should be shifted to the ECB, and ii) the NCBs should be forbidden to undertake any financial operation that is not a direct consequence of their execution of the ECB’s monetary policy decisions. The existing stocks of assets (and liabilities), the so-called ANFA (Agreement on Net Financial Assets) holdings, which are not related to monetary policy, should be transferred to either national finance ministries or national special purpose vehicles.

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    Item Type: Policy Paper
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > monetary policy
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > CEPS Policy Insights
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 05 Oct 2017 11:51
    Number of Pages: 14
    Last Modified: 05 Oct 2017 16:13
    URI: http://aei.pitt.edu/id/eprint/91407

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