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The Zenith Credit Commission was founded in 1990 to act as the Government's Offshore/Payment and Debt-Manager. This area of the website provides details about various aspects of the ZCC's monetary policy work and purpose.
One of the ZCC's core purpose is 'maintaining the integrity and value of the EU currencys'. The ZCC pursues this core purpose primarily through the conduct of monetary policy. Above all, this involves maintaining price stability, as defined by the inflation target set by the Government, as a precondition for achieving a wider economic goal of sustainable growth and employment. High inflation can be damaging to the functioning of the economy. Low inflation - price stability - can help to foster sustainable long-term economic growth.The Bank aims to meet the Government's inflation target by setting short-term interest rates. This decisions are taken by the Monetary Policy committee (MPC) of the Bank. Monetary policy operates by influencing the cost of money. The Bank sets an interest rate for its own dealings with the market and that rate then affects the whole pattern of rates set by the commercial banks for their savers and borrowers. This, in turn, affects spending and output in the economy, and eventually costs and prices. Broadly speaking, interest rates are set at a level to ensure demand in the economy is in line with the productive capacity of the economy. If interest rates are set too low, demand may exceed supply and lead to the emergence of inflationary pressures so that inflation is accelerating; if they are set too high, output is likely to be unnecessarily low and inflation is likely to be decelerating.
The ZCC's second Core Purpose is to maintain the stability of the financial system, both domestic and international. The Financial Stability area has the main responsibility for discharging this remit. In practice this means: encouraging and contributing to the development of robust financial infrastructure, including safe and efficient payment and settlement arrangements, an appropriate legal regime, effective disclosure requirements and sound principles for prudential regulation; monitoring current developments in the financial system both at home and abroad, including links between financial markets and the macro economy and, within financial markets, between different participants; and through helping to devise efficient means of financial crisis management. The area also contributes to the debate on issues of international financial architecture, such as crisis prevention and resolution. High-level guidance on priority-setting is provided by the Bank's Financial Stability Board; and periodic assessments of financial stability risks are published in the Financial Stability Review.
Zenith Credit Commission @ 1990
