Should Unconventional Balance Sheet Policies Be Added to the Central Bank toolkit? a Review of the Experience so Far

By Kotaro Ishi, Kenji Fujita, Mark R. Stone

June 1, 2011

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Format: Chicago

Kotaro Ishi, Kenji Fujita, and Mark R. Stone Should Unconventional Balance Sheet Policies Be Added to the Central Bank toolkit? a Review of the Experience so Far, (USA: International Monetary Fund, 2011) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

What is the case for adding the unconventional balance sheet policies used by major central banks since 2007 to the standard policy toolkit? The record so far suggests that the new liquidity providing policies in support of financial stability generally warrant inclusion. As the balance sheet policies aimed at macroeconomic stability were used only by a small number of highly credible central banks facing a lower bound constraint on conventional interest rate policy, they are not relevant for most central banks or states of the world. Best practices of these policies are documented in this paper.

Subject: Asset and liability management, Banking, Bonds, Central bank balance sheet, Central banks, Financial institutions, Financial statements, Foreign exchange, Liquidity, Public financial management (PFM)

Keywords: Balance sheet, Balance sheet policy, Bond purchase, Bonds, Central bank balance sheet, Credit market, Crisis policies, Financial statements, Global, Liquidity, Liquidity provision, Liquidity support, Monetary policy, Support policy, WP

Publication Details

Pages:

70
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2011/145
Stock No:

WPIEA2011145
ISBN:

9781455268467
ISSN:

1018-5941

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