Unconventional monetary policy operations – to what extent is there an upside for central bank balance sheet risks?

Bernd Schwaab and Diego Caballero

Research Bulletin, 2019, vol. 62

Abstract: This article studies this question by revisiting the Eurosystem's experience during the euro area sovereign debt crisis between 2010 and 2012. In some instances, the Eurosystem was able to remove excess risk from parts of its balance sheet by extending the scale of its operations, in line with Bagehot's well-known assertion that occasionally "the brave plan is the safe plan." JEL Classification: G21, C33

Keywords: central bank communication; lender-of-last-resort; portfolio credit risk; unconventional monetary policy (search for similar items in EconPapers)
Date: 2019-09
Note: 955417
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