From Independent Slovakian Central Bank Policy to the Monetary Policy of the Euro Area

Dr. László Nagy
PhD Assistant Professor, University of Economics in Bratislava

Published in: Public Finance Quarterly 2016/1 (p. 49-64.)

SUMMARY: The study aims to uncover the factors promoting the introduction of the euro by presenting the unique features of independent Slovakian monetary policy and the Slovakian banking system. It examines Slovakian central bank policy in historical context, distinguishing between the period of independent monetary policy and the central bank policy period preceding the introduction of the euro. After outlining the successes and failures of Slovakian monetary policy, the study focuses on the impact of the European Central Bank’s monetary policy on real economy processes in Slovakia. It concludes that due to the abundance of liquidity of Slovakian banks arising from high deposit volume (which was maintained even after the crisis), the quantitative easing programme of the European Central Bank can only have a moderate impact on the Slovakian economy. Using the Slovakian economy as an example, it proves that accession to the currency union has failed to change the relative positions of regions (previously held in the national economy).

KEYWORDS: monetary policy, financial system, interest rate, cointegration

E52, E58, F36, G21

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