I see more advantages than drawbacks in the European approach, since I believe that to achieve good coordination between monetary and macro-prudential policies and ensure sufficient capacity and speed of response, the central bank should play an important role in the design and management of the new macro-prudential instruments and measures. The use of unconventional measures in monetary policy implementation The second change I wish to discuss regarding monetary policy management is the role of what are dubbed unconventional measures. As you will recall, central banks’ immediate reaction to the first signs of the crisis was to deploy all available conventional instruments. Firstly, faced with clogged-up interbank markets, central banks had to directly assume the task of liquidity re-distribution among banks. Also under the heading of conventional measures, most central banks aggressively cut official interest rates to prevent an abrupt and deep decline in activity from triggering a deflationary process. This policy ultimately took intervention interest rates to very low levels. Accordingly, when the worsening of the crisis made it necessary to relax the monetary policy stance even further, most central banks had to look to unconventional instruments. Unconventional measures can be grouped into three major blocks: forward guidance; measures aimed at expanding the central bank balance sheet, and changes in the composition of this balance sheet. The use of forward guidance to steer inflation expectations and interest rates has spread among the main central banks. The ECB resorted to this last summer to anchor interest rate expectations.
(v)  In case of unforeseen excessive liquidity shortage during the day, which would exert excessive pressure on money market interest rates, the CBRT may announce “Intraday Repo Auctions” in addition to the regular ones announced at 11:00 a.m.  (vi)  The primary dealer banks will be able to conduct repo transactions within the framework of open market operations, between 10:00 a.m. –12:00 p.m. and 1:00 p.m.–4:00 p.m.  Technical interest rate cut and the new operational framework In cases where the liquidity shortage in the market increases and/or becomes pronounced to be permanent, the Central Bank will rearrange its operational framework of liquidity management and opt for a technical interest rate cut. Accordingly, (i)  The Central Bank benchmark interest rate will be the interest rates of one-week maturity repo auctions to be held regularly, which are the basic funding instrument. . The repo auction interest rate will match the Central Bank borrowing interest rate applicable to intra-day transactions prior to the period of technical interest cut. For instance, if a decision was made to make a technical interest rate cut on 15 December 2008, the interest rate on repo auctions would be set as 16.25 percent, the rate applicable to intra-day borrowing transactions by the Central Bank. (iv)  With respect to the technical interest rate cut; a.  BIS Review 3/2009  Overnight Interest Rates: The CBT borrowing and lending interest rates will be set 1.25 points below and above the repo interest rate, respectively.