This report analyses the working of monetary policy in Germany, focusing on the period 1960-1971. Part 1 reviews the general background for monetary policy in Germany as set by the main economic trends, fiscal policy and financial structure. Part 2 reviews the main instruments and operating targets of monetary policy. Part 3 is a review of policy developments in their cyclical context and assesses the impact of policy changes on capital flows, monetary and financial aggregates and interest rates. Part 4 carries this evaluation further to the impact on major components of expenditures. The concluding part 5 attempts an overall assessment of the use and effects of monetary policy.