monetary system


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Related to monetary system: international monetary system

monetary system

the assets which make up a country's MONEY SUPPLY and the institutions involved in deposit-taking, money transmission and the provision of credit facilities, together constitute the monetary side of the ECONOMY.

The money supply consists of a number of assets (banknotes, coins etc.), denominated in terms of MONETARY UNITS (pounds and pence in the case of the UK). The institutions involved in handling money include various BANKS, FINANCE HOUSES, BUILDING SOCIETIES etc. The monetary system of a country is controlled by its CENTRAL BANK which uses a number of techniques to regulate the supply of money and interest rates (see MONETARY POLICY).

The monetary system also has an external dimension in that participation by countries in INTERNATIONAL TRADE and FOREIGN INVESTMENT requires the establishment of interactive mechanisms such as EXCHANGE RATES and INTERNATIONAL RESERVES. See INTERNATIONAL MONETARY FUND.

monetary system

the policies and instruments employed by a country to regulate its MONEY SUPPLY. The physical form of the money supply (bank notes, coins, etc.), the denomination of the values of monetary units (pounds and pence, etc.) and the total size of the money supply are basic policy issues.

The instruments that can be used to control the money supply include OPEN MARKET OPERATIONS, SPECIAL DEPOSITS, DIRECTIVES and INTEREST RATES.

The monetary system also has an external dimension insofar as countries engage in international trade and investment, which involve interactive mechanisms such as the EXCHANGE RATE, CONVERTIBILITY and INTERNATIONAL RESERVES. See also MONETARY POLICY, INTERNATIONAL MONETARY SYSTEM.

References in periodicals archive ?
The first and most obvious argument why these three have to work together and why success or failure depends essentially on them, has to do with the size and weight of these market economies in the world economy and in the monetary system as a whole.
It is fair to say, in fact, that while economic problems caused by the stationing of troops in West Germany influenced the creation of a postwar monetary system, neither the monetary system nor disagreements over offset payments seriously affected western defense measures.
From the deeper significance of monetary power relationships, the introduction of the euro will be the most important change in the international monetary system since the transition, achieved during World War I, from the pound to the dollar as the dominant international currency.
The breakdown of the Exchange Rate Mechanism of the European Monetary System in 1992 was a particularly striking case of trying to lock exchange rates together when comparable economic forces were not close to being identical among the countries.
Thereafter I will concentrate on the important issue of determining a monetary system's credibility.
The seventh essay is a survey of the structure of the international monetary system and real resource transfers to LDCs.
The International Monetary System: Essays in World Economics.
Written to be accessible to non-specialists, this report explains how the International Monetary Fund (IMF) ensures the stability of the international monetary system of exchange rates and international payments.
Over the past few years I have been making the case for moving toward a more rules-based international monetary system (e.g., Taylor 2013, 2014, 2015, 2016a, 2016b, 2017).
Culion had its own government, police and monetary system.
And with renewed interest in the stability of the international monetary system, some are asking - including within the IMF - whether revamping the SDR could be part of an effective effort to re-energise multilateralism.
Establishing a stronger and safer international monetary system to prevent risks is of paramount importance for advanced and emerging economies alike.