Question 1:

a. What are the different channels of monetary policy?

b. Discuss why the channels of monetary policy are likely to change in the wake of financial liberalization in a small island economy like Mauritius.

Question 2:

"The shifting from direct to market based instruments of monetary policy becomes inevitable with financial deregulation in order to improve efficiency in financial intermediation and effectiveness of monetary control."" Discuss.

Question 3:

a. Highlight the rationale for development of financial markets in a developing economy

b. How important is a developed money market for a CENTRAL BANK ?

Question 4:

Discuss briefly on any two:

1. Central bank independence
2. Monetary union
3. Corporate governance in the banking industry
4. Currency board arrangements