Question

b. Compare and contrast the conduct of monetary policy in the European Union, the United States and Zambia. What key similarities and differences can we draw from the conduct of monetary policy in these regions by the central Banks? Ensure to highlight key lessons for improvement in the structure and independence of the Central Bank for the Zambia context

Answer 1

Range of instruments for the implementation of monetary policy is used by European Central Bank. Short term interest rates are steered which are served by the the MROs in order to manage the situation of liquidity as well as signalling the state of monetary policy in the euro area while additional refinancing in a long-term are provided by the LTROs to the financial sector.the European Central Bank has the authority of setting the monetary policy along with the stability of price being the primary objective and which place is main supervisor for The Financial institutions in the euro region.monetary policy in United States includes the actions of the Federal Reserve and its communications in order to promote increased or maximum amount of employment along with stability of prices and immoderate interest rates in long term.in Zambia, the conduct of contrary policy mainly based on the framework of MAT since 1990 till march 2012.in this period in Zambia monetary policy helped in reducing the inflation.the primary aim of bank of Zambia is formulation and implementation of monetary and supervisory policies which ultimately helps in achievement and maintenance of price stability and stability of financial system is promoted in the Republic of Zambia.