Monetary Policy of Central Banks in the Times of Financial Crises

Abstract

The aim of this paper is to analyze and to compare unconventional monetary policy measures undertaken by selected central banks: the Czech National Bank, the European Central Bank, the Federal Reserve System, the Bank of England during the recent global crisis. It will also provide a more detailed analysis of these measures in low interest rates environment. Given the situation, once central banks find themselves with interest rates close to zero, financial systems have not been stabilized yet and the economic situation began to deteriorate sharply, by some central banks to carry out unconventional monetary policy, in the form of concrete, but in terms of individual country-specific measures of central banks. However, the central banks follow the same goal - to prevent the emergence of deflation and start economic recovery. Unconventional policy - such as the so - called quantitative easing - in principle focuses directly on the cost and availability of external financing for banks, households and non-financial companies.