The evolution of central banks' lending operations: insights from the Markets Committee Compendium

Hinako Kijima, Patrick McGuire and Bertrand Rime

BIS Quarterly Review, 2026

Abstract: Central banks' monetary policy operational frameworks have evolved in response to pandemic-era interventions, the resurgence of inflation and changes in market structure. The transition to smaller balance sheets, coupled with the growing footprint of non-bank financial institutions, is having a material impact on liquidity demand. Against this backdrop, central banks have begun recalibrating their lending operations, which comprise lending facilities and open market operations that extend funds to private sector borrowers on a collateralised basis. Drawing insights from the updated Markets Committee Compendium, this article examines the key design features and trade-offs related to the counterparty access policies, the collateral framework, pricing and disclosure practices of lending operations.

JEL-codes: E41 E42 E52 E58 (search for similar items in EconPapers)
Date: 2026
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