Global prospects The world economy is once again experiencing a period of slowing growth, only this time the key areas of weakness are found in the emerging markets. Some argue that eight years after the onset of the global financial crisis we are still not out of it yet.
Given that monetary policy works through the money and capital markets, the prolonged impairment of market functioning resulting from the erosion of liquidity will negatively impact the effectiveness of monetary policy. In this regard, efforts by central banks, acting as MMLR, to restore liquidity in the money and capital markets can be deemed as part of monetary policy.