Financial market developments and their implications for monetary policy

Drawing upon experiences in the Asia-Pacific region and beyond, these papers characterise the key financial market trends and developments over the past decade and assess their implications for three aspects of monetary policy: (a) the formulation of policy and the transmission mechanism, (b) the implementation of policy at the operational level, and (c) the use of financial market information in the policy process.

The papers presented at the conference were published as BIS Papers No 39 in April 2008.



Page
Foreword iii
Programme v
Participants in the meeting vii
 
Conference summary 1
Opening remarks
Dato' Ooi Sang Kuang
5
   
Key developments in the financial landscape  
Financial globalisation: key trends and implications for the transmission mechanism
Már Gudmundsson
7
Capital, carry, & complacency: key developments in the financial landscape - dynamics of the foreign exchange market and capital flows
Brendan Fitzsimmons
30
   
Impact on the formulation of monetary policy  
Impact of financial market developments on the monetary transmission mechanism
Sukudhew Singh, Ahmad Razi, Norhana Endut and Helmi Ramlee
49
The changing nature of financial intermediation and its implications
Hans Genberg
100
   
Impact on the conduct of monetary policy  
Financial market innovation in Australia: implications for the conduct of monetary policy
John Broadbent
114
Developing financial markets and operating monetary policy in Asia
Robert N McCauley
126
   
Usefulness of financial market indicators for monetary policy  
Using financial market information in monetary policy: some examples from New Zealand
Clinton Watkins
142
Equity prices as leading indicators: the Asian experience
Kenneth N Kuttner
167