6：Role of monetary policy：2008/07/27(日) 07:35:14 HOST:228.23.100.220.dy.bbexcite.jp
Operational Framework
In order to achieve its primary objective, the Eurosystem uses a set of monetary policy instruments and procedures. This set forms the operational framework to implement the single monetary policy (see Implementation). back to top
Monopoly supplier of monetary base
The Eurosystem is the sole issuer of banknotes and bank reserves in the euro area. This makes it the monopoly supplier of the monetary base, which consists of
currency (banknotes and coins) in circulation,
the reserves held by counterparties with the Eurosystem, and
recourse by credit institutions to the Eurosystem’s deposit facility.
These items are liabilities in the Eurosystem’s balance sheet. Reserves can be broken down further into required and excess reserves.
In the Eurosystem’s minimum reserve system, counterparties are obliged to hold reserves with the national central banks (NCBs). Beyond that, credit institutions usually hold only a small amount of voluntary excess reserves with the Eurosystem.
By virtue of its monopoly, a central bank is able to manage the liquidity situation in the money market and influence money market interest rates. back to top
Signalling the monetary policy stance
In addition to steering interest rates by managing liquidity, the central bank can also signal its monetary policy stance to the money market. This is usually done by changing the conditions under which the central bank is willing to enter into transactions with credit institutions. back to top
Ensuring proper functioning of the money market
In its operations, the central bank also aims to ensure a proper functioning of the money market and to help credit institutions meet their liquidity needs in a smooth manner. This is achieved by providing both regular refinancing to credit institutions and facilities that allow them to deal with end-of-day balances and to cushion transitory liquidity fluctuations. back to top
Guiding principles
The operational framework of the Eurosystem is based on the principles laid down in the Treaty on European Union. Article 105 of the Treaty states that in pursuing its objectives, the Eurosystem "(…) shall act in accordance with the principle of an open market economy with free competition, favouring an efficient allocation of resources (…)".
