Relation between Financial Markets and Monetary Policy – Deutsche Bundesbank and ZEW


The objective of this joint conference with the Deutsche Bundesbank is to discuss recent work connecting financial markets and monetary policy. An understanding of how monetary policy is formulated, implemented, and interpreted is of considerable importance to economists, market players, and, indeed, the general public.

Monetary policy actions have their most direct and immediate effects on the broader financial markets, including the stock market, government and corporate bond markets, and foreign exchange markets. The changes in financial asset prices and returns induced by the actions of monetary policymakers should result in those changes in economic behaviour which the policy was attempting to achieve. These effects are not independent of the implementation and interpretation of monetary policy by the players in financial markets. On the other hand, central banks can use information from financial markets, particularly expectations derived from asset prices, to learn about the perception of monetary policy by the private sector.

Topics to be discussed

  • Interactions of financial markets and monetary policy
  • Term structure of interest rates
  • Open market operations and behaviour of banks
  • Information provided by financial markets and its use in monetary policy
  • Communication policy of central banks (including transparency issues)


Institute address


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