The possible moves also come amid concerns over Trump's
influence on the central bank.
Not exact matches
Because the stock of reserves is so high,
central banks pay «interest
on reserves» (IOR) to
influence market interest rates.
This report is the result of a coordinated research effort by the
central banks of Canada, Italy, Japan, the United Kingdom and the United States and the
Bank for International Settlements
on the determinants of market liquidity and
on how
central banks and other public authorities
influence these determinants.
Many of these factors were outside of
central banks» control until the introduction of quantitative easing, which allowed
central banks to better
influence long - term interest rates by buying bonds
on the secondary market to push down long - term rates and to create new
bank reserves.
The importance of these insights for a proper understanding of
central banks» devices for monetary control becomes instantly apparent once one realizes that, by regulating the actual quantity of its outstanding notes and deposit balances, together with the terms upon which it is willing to make more of the last available
on credit to private sector financial firms, a
central bank is able to
influence, not just the quantity of circulating paper money, but the quantity of money substitutes created by the private sector.
In fact, the
influence of bitcoin is so strong that a senior
Central Bank of Ireland official has gone
on record to state that, «virtual and digital currencies can challenge the sovereignty of states.»
But if the main bright spot in our economy is so dependent
on the Federal Reserve, we should be wary of getting too giddy about a recovering housing market, and be aware that reversing
central bank influence once the economy recovers may be more difficult than the Fed claims it will be.
While
Central Banks have an
influence on this market it is irrational to argue that they can control the prices in this market.