2016/9/20 Media News Chinese financial markets Sept 15, 2016: Bank of England leaves interest rates unchanged Part 1: Central Bank and pboc MPC holds Bank Rate at 0.25 ins government bond purchases at d see if the economy can continue to weather the initial shock of the Brex By Zhang Xiaorong 025%E10 Fudan University, Shanghai, China Media News Monetary Authority July 27, 2016: Fed Keeps Rates Unchanged Monetary authority" is a generic term in finance and economics for the entity which controls the supply of of 0. 25% to 0.50%)but risks to the u.s. economic outlook had diminisher ther parameters which control the cost and availability of Generally, a monetary authority is a central bank: the Federa ng in June. It added that househo Reserve: People s Bank of China; Bank of Japan Other arrangements: ECB; HK Monetary Authority; Free king where a broad range of entities can issue notes ss worry about possible shocks that could push the U.S. economy off Monetary Authority Monetary Policy at determine the size and rate of owth of the money supply, which in turn affects interest creasing the supply of money to stimulate the economy when it,s in recession 12016/9/20 1 Chinese Financial Markets Part 1: Central Bank and PBoC Sept.‐Dec.2016 By Zhang Xiaorong Fudan University,  Shanghai, China 1-1 Media News • Sept.15, 2016: Bank of England leaves interest rates unchanged – All nine MPC members took the wait‐and‐see approach by voting to stick with the measures announced in August – MPC holds Bank Rate at 0.25% maintains government bond purchases at £435bn and corporate bond purchases at £10bn – The Bank of England left the door open to another interest rate cut this year but decided that the safest option for now was to wait and see if the economy can continue to weather the initial shock of the Brexit vote. 1‐2 Media News • July 27, 2016: Fed Keeps Rates Unchanged – The Federal Reserve left interest rates unchanged on Wednesday (left its benchmark overnight interest rate in a range of 0.25% to 0.50%) but said near‐term risks to the U.S. economic outlook had diminished, opening the door to a resumption of monetary policy tightening this year – The U.S. central bank said the economy had expanded at a moderate rate and job gains were strong in June. It added that household spending also had been "growing strongly," and pointed to an increase in labor utilization. – While Fed policymakers said they continued to closely monitor inflation data and global economic and financial developments, they indicated less worry about possible shocks that could push the U.S. economy off course. 1‐3 Monetary Authority • “Monetary authority” is a generic term in finance and economics for the entity which controls the money supply of a given currency, and has the right to set interest rates, and other parameters which control the cost and availability of money. • Generally,  a monetary authority is a central bank: the Federal Reserve; People’s Bank of China; Bank of Japan • Other arrangements: ECB; HK Monetary Authority; Free banking where a broad range of entities can issue notes or coin. 1‐4 Monetary Authority 1‐5 Monetary Policy • The actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates and economic activities. • Monetary easing means reducing the cost of money or increasing the supply of money to stimulate the economy when it’s in recession; • monetary tightening means the contrary conductions when the economy is overheating. 1‐6