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Lecture 17

ECON 3K03 Lecture Notes - Lecture 17: Payments Canada, If And Only If, Quantitative Easing


Department
Economics
Course Code
ECON 3K03
Professor
Helene Wagner
Lecture
17

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Copyright © 2014 Pearson Canada Inc.
Chapter 17
TOOLS OF
MONETARY POLICY
Mishkin/Serletis
The Economics
of Money, Banking,
and Financial Markets
Fifth Canadian Edition

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Copyright © 2014 Pearson Canada Inc. 17-2
Learning Objectives
1. Characterize the framework for the implementation
of monetary policy in Canada
2. Explain the market for reserves and the
channel/corridor system for setting the overnight
interest rate in Canada
3. Identify the Bank of Canada’s approach to monetary
policy and the conventional and nonconventional
tools of monetary policy
4. Explain how the Federal Reserve and the European
Central Bank can use their policy tools to manipulate
interest rates and the money supply

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Copyright © 2014 Pearson Canada Inc. 17-3
The Large Value Transfer System (LVTS)
LVTS
electronic, real-time net settlement network
designed to provide immediate finality and settlement to
time-critical transactions
put in place in order to eliminate systemic risk
LVTS participants know in real time their large-value,
wholesale transactions (over $50,000)
Transactions account for < 1% of the total number of
transactions
They make up 94% of the value of transactions in
Canada
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