Central Banking: back to the future

This discussion paper explores the nature of the transmission of monetary policy from the central bank to the financial markets in a modern, deregulated, financial system in which there are few impediments to financial efficiency. The subject is one on which there is debate amongst monetary theorists and central banking practitioners alike. In particular, there has been a focus on the question of whether advances in information technology are changing the nature of money and undermining the ability of central banks to implement their monetary policies.