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

71 Pages Posted: 28 Jun 2011

See all articles by Mark Stone

Mark Stone

International Monetary Fund (IMF)

Kotaro Ishi

International Monetary Fund (IMF)

Kenji Fujita

International Monetary Fund (IMF)

Date Written: June 2011

Abstract

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.

Suggested Citation

Stone, Mark and Ishi, Kotaro and Fujita, Kenji, Should Unconventional Balance Sheet Policies Be Added to the Central Bank Toolkit? A Review of the Experience so Far (June 2011). IMF Working Paper No. 11/145, Available at SSRN: https://ssrn.com/abstract=1873783

Mark Stone

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Kotaro Ishi (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Kenji Fujita

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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