Editorial by Volker Wieland on the role of cash in monetary policy ("Zeitschrift für das gesamte Kreditwesen")

According to Volker Wieland monetary policy can reach its objectives without restricting the availability of cash. In a contribution regarding cash for the new issue of the "Zeitschrift für das gesamte Kreditwesen" Wieland warned against ignoring the value-storing function of cash. Wieland's editorial is based on his speech at the Bundesbank's cash symposium.

In Wieland's opinion it is not necessary to limit the citizens' access to cash, let alone to lower the interest rate floor even further. Monetary policy remains powerful despite the interest rate floor as demonstrated by Wieland's research. In spite of the interest rate floor the central bank is able to reach its objectives by quantitative easing. These policy easing measures imply an expansion of the central bank's balance sheet, e.g. by direct purchase of securities.

Zeitschrift für das gesamte Kreditwesen: Overview 14/2016

Speech by Volker Wieland on "The role of cash in monetary theory and monetary policy" (PDF, 69 KB) (German)

Video of Volker Wieland's speech at the Bundesbank cash symposium