CHAPTER TWO

Monetary Policy—Implications for Bank Management

CHAPTER STRUCTURE
KEY TAKEAWAYS FROM THE CHAPTER
  • Understand why banks hold reserves

  • Learn about the tools of monetary policy

  • Understand how the monetary policy impacts banking operations and management

SECTION I
BASIC CONCEPTS

A Macroeconomic View

The primary objective of a country's government is to achieve economic stability and growth. Hence, macroeconomic policies will typically target and monitor three basic indicators: prices, employment and balance ...

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