SNB: money market rates best target during recessions
Targeting the money market rate produces lower variability in teh economy and is a better policy target than a repurchase rate during periods of financial turmoil, a Swiss National Bank paper published on 19 August says.
Most central banks target a short-term market interest rate. However, some target the rate they charge financial institutions for the provision of short-term funds - typically a repo rate. During the financial crisis, the level and volatility of interest rate spreads increased
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