of not starting from scratch in this effort. there already exists a rich academic literature on monetary policy implementation frameworks, and we saw some relevant examples this morning. this literature dates at least back to the late 1960s, when bill poole developed a model that is still being used today. 7 recent developments have revealed that our money markets are not frictionless, and current research incorporates this reality of market segmentation. some of the papers we have seen today try to contend with the effects negative rates did not require any changes in these central bank ’ s respective frameworks for policy implementation, although some legal and operational work was required. william poole, “ commercial bank reserve management in a stochastic model : implications for monetary policy, ” journal of finance 23, no. 5 ( 1968 ) : 769 – 91. bis central bankers ’ speeches of new regulation, 8 or try to model impediments to trade in the form of preferred habitat frictions9 or search frictions. 10 these new models provide fresh insights and can also be useful for us in communicating with academics and market experts. these improvements are notable because they represent a significant departure from views that were espoused a few decades ago. 11 much research before the crisis put too much faith in market efficiency and spent too little time exploring the detailed plumbing of the financial system. 12 empirical work can also contribute to our thinking about monetary policy implementation. what more can we learn about the relationship between different money markets, such as the spreads between various secured and unsecured rates? 13 how much should we care about volatility in money markets and how does that volatility affect the monetary policy outcome? we saw some interesting work on the topic today. 14 in the united states, we also have the benefit of internal work, now public, that we undertook previously. the federal reserve had started to examine ways to improve its policy implementation framework before the crisis. analytical work between 2006 and 2008 provides a solid foundation from which to build. as you may recall, in 2006 congress granted the federal reserve the authority to pay interest on reserve balances held by depository institutions, and this authority was originally set to become effective in 2011. 15 we went to work to try to understand how best to employ this new tool. the focus of that work was on operating regimes to target the fed funds rate. basically, it considered several variants of corridor and floor systems. the financial crisis interrupted this work, and it was not completed as had been intended.

emu. in running this relay race, we need to discuss the optimal allocation of responsibilities between the national and european level. but for this not to happen through the back door, we need to open it up to public debate. the yearly european parliamentary week offers a perfect forum in which to bring it forward. thank you very much and i look forward to today ’ s debate. 1 see “ the evolution of the ecb ’ s accountability practices during the crisis ”, economic bulletin, issue 5, ecb, 2018. 3 / 3 bis central bankers'speeches