TAILIEUCHUNG - Lecture Financial markets - Lecture 14: Monetary policy

This chapter explores the origins of central banking, from the goldsmith bankers in the United Kingdom to the founding of the Bank of England in 1694, this chapter also outlines the evolution of its banking system from the Suffolk System, via the National Banking era; emphasize the federal funds rate, targeted by the Federal Open Market Committee, as well as the recent change to pay interest on reserve balances at the Federal Reserve, enacted by the Emergency Economic Stabilization Act from 2008. | Lecture 14: Monetary Policy Bank of England 1694 Granted monopoly on joint stock banking by Parliament in return for war loans. Not an invention of economists, started off as a powerful bank that was able to demand that other banks held deposits in it. Did not have government monopoly on note issue, but achieved it through its monopoly power. Banks of the United States Loosely modeled after Bank of England First Bank of the United States 1791-1811, was promoted by Alexander Hamilton Second Bank of the United States 1816-1836. President Andrew Jackson called it a “dangerous monopoly,” conflict with Nicholas Biddle, president. Suffolk System, Massachusetts Nineteenth Century Problems and Solutions Privately issued bank notes Discounts on notes Banking panics associated with business depressions National Banking System, 1863, mostly ended panics until 1907. 1907 panic saved by J. P. Morgan Under National Banking System inflexible money supply, strongly seasonal interest rate Led to creation of Federal Reserve Federal Reserve System - 1913 Created flexible money supply, responding to business situation Fed was lender of last resort 12 Regional banks, each presides over a district. Two in Missouri Board of Governors in Washington DC Board of Governors 7 members, 14-year terms Chairman has 4-year term. Traditional power of the chairman Independent of executive and legislative branch. An “independent central bank.” Chairman must make semiannual monetary policy reports (Humphrey Hawkins) Banking Panic of 1933 Despite Fed’s lending, a banking panic forced Roosevelt to declare a banking holiday Led to establishment of Federal Deposit Insurance Company (FDIC) opened doors in 1934, funded by premia paid by banks No U. S. panics since European Central Bank Founded 1998 Eurozone members and non Eurozone members Had to construct Eurozone data for first time President Jean-Claude Trichet since 2003 Otmar Issing New Euro Currency Currency first issued January 1, 2002 “The parallel

• Tài chính doanh nghiệp
• Financial markets
• Lecture Financial markets
• Economics 252
• Monetary policy
• Bank of England 1694
• Banks of the United States
• Thị trường tài chính
• Financial futures markets
• Valuation of financial futures
• Interest rate futures
• Financial institutions
• Lecture Financial markets and institutions
• Financial institutions markets
• Capital markets
• Money markets
• Derivative securities markets
• Futures markets
• Option markets
• Swap markets
• Foreign exchange derivative markets
• Bank management
• Types of Financial Markets
• Securities traded
• Valuation of securities
• Money market yields
• Bond markets
• Municipal bonds
• Mortgage markets
• Primary mortgage market
• Stock markets
• Common stock
• Foreign exchange markets
• Foreign exchange
• Commercial banks
• Financial statements
• Risks at financial institutions
• Market risk
• Exchange rates
• Efficient markets
• Excess volatility
• Efficient Markets Hypothesis
• Interest rate derivative markets
• Interest rate swaps
• Mortgage backed securities
• Globalization of mortgage markets
• Financial markets and institutions
• The financial system
• Interest rates change
• Financial markets efficient
• Term structure affect interest rates
• The stock market
• The mortgage markets
• The international financial system
• Financial regulation
• Interest rate fundamentals
• Interest rates
• Security valuation