Live Comments BoE Bailey: Level of reserves should be adjusted first when withdrawing stimulus

    BoE Bailey: Level of reserves should be adjusted first when withdrawing stimulus

    In a Bloomberg op-ed, BoE Governor Andrew Bailey said the “the current scale of central bank reserves mustn’t become a permanent feature.” Also, “elevated balance sheets could limit the room for maneuver in future emergencies”.

    Hence, “when the time comes to withdraw monetary stimulus, in my opinion it may be better to consider adjusting the level of reserves first without waiting to raise interest rates on a sustained basis.”

    Bailey’s idea was in contrast to former BoE Governor Mark Carney’s. Carney indicated before that BoE would raise interest rate materially, before starting to lower the holding of the asset purchased.

    NO COMMENTS

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here

    Exit mobile version