The Design of the Eurosystem's Monetary Policy Instruments

Focusing on the intricacies of monetary policy in the euro area, the book presents a theoretical model that integrates central bank activities with bank liquidity management. It analyzes the Eurosystem's monetary policy instruments, revealing how varying costs of liquidity access contribute to the interbank market dynamics. The study positively assesses the 2004 redesign of these instruments and suggests that modifying the minimum reserve system could further improve monetary policy flexibility within the euro area.