VII. Credit Policy

a) Supply the articles where necessary.

b) Write down 3-5 questions about the text.

c) Describe the principal instruments of credit policy.

Credit policy is____ component of economic policy. It is a combination of measures

taken by___ Central Bank to affect the supply of credit. The aims of_____ credit policy may

include stimulation or restriction of investment or consumer spending,________ avoidance of

price inflation (цінова інфляція).

Credit policy and monetary policy tend to be closely related and in some countries
credit policy is regarded as____ part of monetary policy.

Credit policy largely works indirectly. The Central Bank controls______ amount of credit

advanced (розміри кредиту, наданого) by commercial banks through the interest rate

policy, by influencing____ liquidity, expanding or contracting the volume of Central Bank

money. The principal instruments available for this purpose are __________ discount policy

(облікова політика), minimum reserve requirements and open market operations.
Direct credit control involving _______ establishment of credit ceilings (максимальний

156 PART III. BANKING

розмір кредиту) is less frequently used now than in __________ past, many governments

regarding it as____ undesirable interference with the market mechanism.