Central Banks’ Evolution: Impact of Central Banks’ regulations and decisions on financial markets

Details

Supervisors

Iania, Leonardo

Faculty

Louvain School of Management

Degree label

Master [120] en sciences de gestion

Abstract

Central Banks have been on the front stage during these last years, especially due to the last crisis: the subprime crisis and the financial crisis. Many questions have emerged concerning the roles, the goals and what solutions can they bring to maintain or improve the economy on the national and international stage. The thesis that follows will be split in two main parts. The first part “History of Central Banks” will be more historical and will explain when and how they emerged, what was their goals and roles on the national and international stage and, how they evolved over time. In this first part we will see that it was not so easy to give a clear definition of Central Banks especially due to the misunderstanding of their goals and roles. We will also review the major’s events of the 20th and 21st centuries and the impact of Central Banks' decisions on the national and international economy. And for the second part we will try to point out the influence of Central Banks’ decisions on financial markets. We will focus on an unconventional policy which has been put in place in recent years: The negative interest rates policy. To study this case, we will use econometrics models over different countries which will allow us to make a comparison between those that chose to implement this policy and those that didn’t and thus, see if the decision shows significant effects on financial markets or not