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Open-Market Operation

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Open-market operation
Purchase or sale of government securities by the monetary authorities to increase or decrease the domestic money supply.

Open-Market Operations
The buying and selling of U.S. Treasury securities. The Federal Reserve conducts open market operations as a primary way of influencing inflation and economic growth. These securities are sold at certain interest rates as a way of controlling the money supply. See also: FOMC.


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Thus, expansionary monetary policy via standard open-market operations by a central bank is the first item on the checklist of what to do in a financial crisis.
Besides expanding the TAF's money-creating activity, the Fed also announced an additional $100 billion to be offered in the form of 28-day repos through the Fed's open-market operations.
[GRAPHIC OMITTED] Except for the instruments involved, the mechanics of an intervention are exactly like those of an open-market operation, and like open-market operations, foreign-exchange interventions have the potential to alter the amount of reserves in the banking system.
 
 
 
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