THE MONETARY POLICY UNDER THE IMPACT OF THE RECENT GLOBAL FINANCIAL CRISIS

Major negative implications of the recent global financial crisis on the financial system, monetary transmission mechanism and the real economy led to unprecedented, rapid, strong actions and of considerable size from central banks, particularly in developed countries severely affected. From the perspective of monetary policy, central bank reactions have resulted in progressively and of unprecedented size decreasing of the monetary policy interest rate, adjustment of conventional monetary policy operational framework and in particular, the designing and use of new tools, specific for the crisis period, respectively the unconventional monetary policy instruments. In this context, our paper aims to highlight, mainly, some innovative actions taken by some major central banks, aiming mainly to facilitate the transmission of monetary policy on the real economy and restore the confidence of market participants in the financial system. Also, our study highlights some of the effects and potential costs of innovative instruments for monetary policy, and the challenges posed by these to central banks.