A second factor supporting Bernanke's characterization of credit easing rather than quantitative easing is the effect of the Desk's open market operations
on the Federal Reserve's balance sheet during the fourth quarter, as described earlier (fewer Treasury securities, more federal agency and mortgage-backed securities).
Historically, the Fed has offset the effect of discount window lending on the total supply of credit through open market operations
. (2) That is, if depository institutions borrowed at the discount window, the Fed would offset the effect of this increased borrowing on the monetary base by selling a comparable amount of securities in an open market operation
Suda put the shortfall in tenders in the open market operation
in a positive light, saying the phenomenon is taking place because the financial system has been improving on the back of declining nonperforming loans.
(23.) The proposal is called z directive because it provides instructions to the manager of the system's portfolio about how he or she should conduct open market operations
during the intermeeting period--specifically, to hit the target for the federal funds rate set by the Committee.
If there is a systemwide shortage or surplus of settlement balances, the Bank of England conducts open market operations
or lending operations to adjust the overall amount of settlement balances.
The president of the New York bank is always a member because the New York bank is charged with the open market operations
both in Treasury securities and in foreign exchange.
"Our active domestic open market operations
interact in close coordination with foreign exchange market operations, adjustments to reserve requirements, systemic macro-prudential measures and risk-based supervision of individual banks," added Espenilla.
5 (Petra)-- China's central bank today pumped in billions of dollars, stated to be the biggest since September, into the financial system in open market operations
in a bid to ease a liquidity strain in the world's second largest economy.
China's key money rate fell to nearly a 10-month low, shrugging off a net drain in open market operations
due to ample liquidity.
Open market operations
can be another source of liquidity to the system.
It is commonly believed that the Fed's ability to control the federal funds rate stems from its ability to alter the supply of liquidity in the overnight market through open market operations
. This paper uses daily data compiled by the author from the records of the Trading Desk of the Federal Reserve Bank of New York over the period March 1, 1984, through December 31, 1996: He analyzes the Desk's use of its operating procedure in implementing monetary policy and the extent to which open market operations
affect the federal funds rate--the liquidity effect.
The yield on the key 10-year Japanese government bond briefly fell to a record intraday low Wednesday morning after the Bank of Japan said it will conduct open market operations
to purchase government bonds.