As developing countries and economies in transition have relied on deregulated, competitive markets to spur growth, their central banks have shifted toward using open market operations as a tool of monetary policy. To be most effective, such operations require supportive changes in other policy instruments (reserve requirements, discount window), a competitive banking system and securities market, and adaptation of particular open market or market-type instruments used to the stage of, and potential for, market development. The paper assesses options available to a central bank for encouraging a competitive market architecture and designing instruments for implementation of open market operations.

Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.

In 1978, China embarked on a gradual but far-reaching reform of its economic system. This paper focuses on the achievements so far in reforming the financial sector, the legal framework for financial transactions, the payments system, and the monetary policy and foreign exchange system. It also analyzes the tasks ahead to achieve the goals set in these areas for the year 2000.

The first of its kind, this book is entirely dedicated to the implementation of monetary policy. Monetary policy implementation has gone through tremendous changes over the last twenty years, which have witnessed the quiet end of 'reserve position doctrine' and the return of an explicit focus on short-term interest rates. Enthusiastically supported by Keynes and later by the monetarist school, reserve position doctrine was developed mainly by US central bankers and academics during the early 1920s, and at least in the US became the unchallenged dogma of monetary policy implementation for sixty years. The return of interest rate targeting also corresponds largely to the restoration of central banking principles established in the late 19th century. Providing a simple theory of monetary policy implementation, Bindseil goes on to explain the role of the three main instruments (open market operations, standing facilities, and reserve requirements) and reviews their use in the twentieth century. In closing, he summarizes current views on efficient monetary policy implementation.

A selective index of major research papers prepared by IMF staff in 1991-98.

The paper uses data from transition economies in Central and Eastern Europe to assess four questions: (i) Did the standard blueprint for stabilization work, and was it implemented? (ii) To what extent was normal macroeconomics impeded by solvency problems in banks, and how successful have been policies to improve incentives within banks? (iii) Could financial markets and other infrastructure for monetary policy have been developed more quickly? (iv) How should transition economies respond to the monetary inflows that typically accompany success? The paper concludes by evaluating the changing advice offered by external agencies during the 1990s.