Even in that case, overnight market rates will be kept below the official discount rate because financial institutions are able to borrow at the Bank of Japan’s discount window at their discretion.
The Federal Reserve Bank of Dallas has created a Globalization and Monetary Policy Institute, which will support the study of globalization’s effects on policy and the economy, and a number of other Reserve Banks have undertaken similar efforts. In the remainder of my talk I will discuss two channels through which globalization may have affected the transmission and effectiveness of U.S. monetary policy.