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Federal Reserve Bank of Cleveland
Economic Review
Comparing Central Banks' Rulebooks
Edward J. Stevens

A central bank's daylight overdraft and reserve requirement rules influence payments institutions and its own monetary policy operating practices. This article contrasts Federal Reserve rules with those of the Deutsche Bundesbank, the Bank of Japan, and the Bank of England. The fundamental lesson is that no unique set of regulations is necessary for the effective performance of a central bank's monetary and payments system functions. However, adopting a different rulebook (by eliminating Federal Reserve daylight overdrafts or reserve requirements, for example) would entail some adaptation of payments institutions and monetary policy operating practices. Comparisons to the other central banks indicate what some of these adaptations might be.

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Edward J. Stevens, "Comparing Central Banks' Rulebooks" , Federal Reserve Bank of Cleveland, Economic Review, issue Q III, pages 2-15, 1992.
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