A Central Bank’s optimal balance sheet size?

Charles Goodhart

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Unlike other facets of monetary policy renormalisation, there has been little discussion yet of what principles should determine the optimum size of a Central Bank's balance sheet, the end-point to which on-going portfolio reductions should approach. In this note I start by addressing the arguments of those who would leave this balance sheet very large, much as now; and then continue with the counter-arguments, also stressing the nature of the relationships between monetary and fiscal policies, and between the Central Bank and the Treasury's Debt Management Office.

Keywords: Central Bank balance sheet; monetary policy renormalisation; debt management; interest rate risk; auction risk (search for similar items in EconPapers)
JEL-codes: F3 G3 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2017-09
New Economics Papers: this item is included in nep-cba, nep-mon and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:84205

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