Central Banking

IMF reviews response to turmoil

International Monetary Fund research analysing the response to the recent credit crunch suggests that central banks should develop common elements in their operational frameworks.

The paper believes the major central banks should all adopt the four elements that the data indicates were most instrumental in calming markets.

These were:

· rapid liquidity provision to a broad range of counterparties;

· a congruence of collateral policies with market developments;

· an ability to raise the aver