KREDIT und KAPITAL - Issue 1/1978



Schlesinger, Helmut
Die Geldpolitik der Deutschen Bundesbank 1967-1977

Wallich, Henry C. and Keir, Peter M.
The Role of Operating Guides in U.S. Monetary Policy: A Historical Review

Théron, Marcel
La Politique Monétaire Francaise au cours des dix dernières années

Basler, Hans-Peter
Die wirtschaftspolitischen Zielpräferenzen der Deutschen Bundesbank - Eine empirische Analyse des Zentralbankverhaltens für die Zeit von 1958 bis 1974

Krümmel, Hans-Jacob
Perspektiven des Wertpapiergeschäftes

Book Reviews

Witte, Manfred
Probleme der Substanzerhaltung der Unternehmen bei Geldentwertung aus volkswirtschaftlicher Sicht
(Friedhelm Dierkes)

Schwanewede, Gerd
Finanzmärkte in der Bundesrepublik Deutschland
(Gerhard Zweig)

Starbatty, Joachim
Erfolgskontrolle der Globalsteuerung. Konjunkturpolitik unter dem Einfluß der politischen Willensbildung
(Manfred Piel)

Reiners, Josef
Bankwirtschaftliche Verbundsysteme und ihre Stabilität
(Oswald Hahn und Rolf Konold)


Schlesinger, Helmut
“The Monetary Policy of the German Bundesbank, 1967 - 1977”

The monetary policy of the German Bundesbank in the years from 1967 to 1977 embraces in two respects two very different periods. On the one hand, the years up to and including 1971 belong in the still sustained, though expiring, period of high postwar prosperity with relatively strong growth, low unemployment and slowed depreciation of currency. In the ensuing years, the real conditions precedent for economic development deteriorated considerably. For the monetary policy of the Bundesbank there followed a hiatus with the transition to flexible exchange rates in spring 1973. Up to that time, an important object of Bundesbank policy consisted in neutralizing excessive creation of central bank money by the purchase of foreign exchange by way of liquidity-skimming measures. However, convulsive expansions of the quantity of money and inflation of the price level could not be prevented. With the transition to flexible exchange rates, the conditions for monetary policy improved. The creation of central bank money is now again more a consequence of the - more easily influencable - domestic business of the Bundesbank. Nevertheless, dependence on foreign trade is still an important factor: interventions in the European exchange rate union play a part just as much as the compulsion to check excessive exchange rate fluctuations relative to other currencies. The monetary policy of the Bundesbank took advantage of the greater latitude for action gained with the change to floating primarily - and with a fair amount of success - to damp inflationary trends and inflation expectations. Later on, that policy was again oriented more to exerting influence on cyclical trends and exchange rate fluctuations. The advance notice of a defendable expansion of the quantity of money(defined as the quantity of central bank money) is an attempt to objectivize monetary policy, which up to the present has been received favourably by the public, but on which no definitive judgment can be passed as yet.


Wallich, Henry C. and Keir, Peter M.
„The role of operating guides in U.S. monetary policy - A historical review “

This essay discusses operating techniques and policy guides for U.S. monetary policy since the end of World War II. During the late 1930's and 1940's, monetary policy had played a relatively minor role. In the late 1940's, the policy of rigidly supporting the Government securities market, mandated by the Treasury, made the Federal Reserve an "engine of inflation". The 1951 "Accord" between the Federal Reserve and Treasury restored the freedom of monetary policy. In early 1953, to avoid relapsing into "pegging" of interest rates, the Federal Reserve decided to confine its open market operations to very short-term securities, a policy that came to be known as the "bills only" doctrine. By focusing these open-market operations on immediate financial targets, especially short-term interest rates and the "free reserves" of member banks, the Federal Reserve sought to influence real sector objectives such as growth, employment, price level stability, and the balance of payments. From this emphasis on short-term interest rates and free reserves, the Federal Reserve in the early 1960's began to shift toward so-called intermediate targets, by focusing on the growth of money and bank credit. In this process, first bank credit and later money supply targets initially were used to constrain interest rate objectives, setting limits on the latter whenever the consequences for money and credit expansion threatened to become inappropriate. Later, the respective rotes of money supply and interest rates frequently were reversed, with monetary targets as the primary objective and interest rates as the limiting constraint. The growing emphasis on money-supply targets, during the 1970's, reflects the mounting inflation and the possibility that, under these conditions, nominal interest rates may not be are liable guide for policy. The Federal Reserve continues, however, to take into account both interest rates and money supply. Originally, primary emphasis among the different concepts of the money supply was given to M1 (currency and demand deposits). In view of the diminished stability in the relation of M1 to interest rates and income which began to be felt in 1974, however, equal weight has been given to M2 (M1 plus time and savings deposits in commercial banks).


Théron, Marcel
“French Monetary Policy over the Past Ten Years”

In the course of the past ten years, monetary policy has become increasingly important. While at the beginning of this period it was merely a simple factor to sustain growth and full employment, it later became a fundamental element in combatting inflation. In France, as in other countries, this development undoubtedly stems from a better understanding of the subsequent effect of an excessive increase in liquidity of firms and households. Though the Banque de France may set itself a monetary objective, that does not make it a proponent of monetarist theory by a long way. It is true of the central bank, however, that while not necessarily a supporter of monetarist theory, in practice it has always been more or less monetarist-oriented. With a view to slowing down the increase in liquidity and stabilizing the liquidity ratio of the economy, the central bank has used very diverse means, some of which have proved disappointing in practice to the extent to which their effectiveness was weakened by external restrictions or occasionally underestimated internal structural rigidities. In the period under review, however, the central bank came to realize that credit restriction is an indispensable instrument for the current situation. By announcement of a monetary objective for the years 1977 and 1978, appreciation on the part of public authorities of the fact that limitation of credit expansion is meaningful only within the framework of concerted action embracing all sources of money creation has been heightened. Monetary policy is not a comprehensive and effective panacea for treating an inflation and an economic crisis of which the origin does not lie in the monetary domain. The growing importance of the role of monetary policy must not lead to its being assigned an exclusive character, but only to its being allotted its proper place among the changing components of overall economic policy.


Basler, Hans-Peter
“The Economic Policy Objective Preferences of the German Bundesbank - An empirical analysis of central bank behaviour in the period from 1958 to 1974”

In contrast to numerous normative research studies, little has been done so far to elucidate the policy behaviour and the actual objective preferences of the German Bundesbank. Our study counters this lack by means of a positive analysis of Bundesbank behaviour. We proceed from the following consideration: if the German Bundesbank reacts in a systematic manner to objective obstructions, it must be possible to derive from its policy actions information on its objective preferences and its preferred instrument variables. Formally, the policy framework is formulated with the help of an asymmetrical loss function, minimization of which, allowing for structural restrictions, leads to the reaction functions of the German Bundesbank. Then, in the ensuing extraction process, the objective and Instrument preferences are obtained from the econometrically estimated reaction coefficients. Our empirical analysis tests the validity of the following hypotheses for the reference period:
1st hypothesis: The German Bundesbank gave priority to price stability in all phases of the cyclical trend.
2nd hypothesis: German monetary policy was constantly involved in a conflict between the requirements of internal and external equilibrium.
3rd hypothesis: The objective preferences of the German Bundesbank were independent of those of the government.
In the empirical results we find the 1st and 2nd hypotheses confirmed, while the 3rd hypothesis must be rejected. We assert therefore: in the reference period, the objective preferences of the German Bundesbank were not independent of those of the government. Moreover, Bundesbank behaviour reveals a higher assessment of liquidity-policy over interest-rate-policy instruments.


Krümmel, Hans-Jakob
“Perspectives of the Securities Business”

In this essay, Perspectives of the securities business deriving from market developments in the seventies are considered in the light of banking policy. In the past decade, an almost loophole-free system of financing instruments has been built up on the domestic and foreign capital markets, a refutation of the charges of traditionalism and lack of imagination levelled against the banking system. The cause of this development lies, above all, in the instability of the terms and conditions on the market (interest rate and maturity structure), which has led to narrowing down of the maturity band with in the direction of shorter maturities. The "continuum of financing Instruments" is also attributable, however, to new financing needs such as recycling of petro-dollars, large power station construction and, in the domain of government finance, a change from traditional budget deficit financing to the financing of cyclically effective expenditures. Lastly, institutional impediments have also resulted in the creation of flexible and efficient Instruments, particularly loans against notes. The completion of the capital market assortment has left two gaps. the industrial debenture and the share. An attempt is made to demonstrate that the weakness of these two instruments is beyond the sphere of influence of the banking system. A second group of problems is the changed risk situation of the banking system resulting from market developments in the seventies, partiularly due to the addition of the risks on capital markets abroad. The author advances the view that despite actually observable changes in the risk structure there is scarcely any need for special regulations issued by domestic supervisory authorities. In particular, the question is examined of whether the high-interest phase indicates the advisability of including listed fixed-interest securities in the credit-business components of Principle III of the Federal Supervisory Office for the Banking Business. The third section deals with competition questions of underwriting syndicates business such as the alleged monopoly position of underwriting consortiums and the permanent establishment of underwriting ratios. In the fourth section, the use of EDP in the securities business and paperless securities transfers are discussed as future technical perspectives. The problems here lie not in the technical sphere or in the limitation of the market spectrum, but in the fundamental interest in protecting trust as the basis of banking business.