THE SINGLE MONETARY POLICY IN STAGE THREE
GENERAL DOCUMENTATION ON ESCB MONETARY POLICY INSTRUMENTS AND
PROCEDURES
Introduction
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In January 1997 the EMI published a report entitled "The single monetary policy in Stage Three: specification of the operational framework". The report aimed to provide information to the public on the operational aspects of the ESCB's monetary policy, including strategic considerations and the main features of the instruments, procedures and supporting functions under preparation by the EMI. Since then, further progress has been made in the preparatory work of the EMI. The present report updates the framework, taking account of the progress made in the specification of the ESCB's monetary policy instruments and procedures. This report was prepared with the assistance of the EMI's Monetary Policy Sub-Committee. It is intended to become the "general documentation" on the monetary policy instruments and procedures of the ESCB, particularly aiming to provide counterparties with the information they need in relation to the ESCB's monetary policy framework. It should be noted that the final decision on the operational framework for the single monetary policy will be taken by the Governing Council of the ECB after its establishment. The Governing Council of the ECB may decide not to use all the available options or may change certain features of the instruments and procedures presented in this general documentation. Nevertheless, the present report has been written in such a way that it would be possible for the Governing Council of the ECB to adopt the content without further amendments, if so desired1. The general documentation will not in itself confer rights on counterparties. The legal relationship between the ESCB and its counterparties will be established in appropriate contractual or regulatory arrangements. In addition, specific documentation will have to be prepared for the implementation of certain aspects of the monetary policy framework described in this report. The EMI intends to prepare this documentation prior to the establishment of the ESCB. This report is divided into eight chapters: Chapter 1 gives an overview of the operational framework for the monetary policy of the ESCB. In Chapter 2 eligibility criteria for counterparties taking part in ESCB monetary policy operations are specified. Chapter 3 describes open market operations, while Chapter 4 presents the standing facilities available to counterparties. Chapter 5 specifies procedures applied in the execution of monetary policy operations. In Chapter 6 the eligibility criteria for underlying assets in monetary policy operations are defined. Chapter 7 presents the ESCB's minimum reserves system. Finally, specific provisions to be applied in the transition to Stage Three are dealt with in Chapter 8. Annexes to the report contain examples of monetary policy operations, a glossary, rules for holdings of minimum reserves through an intermediary, criteria for the selection of counterparties to ESCB foreign exchange policy operations and a presentation of the reporting framework for the ECB's money and banking statistics. |
ECB - European Central Bank