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Qualitative Easing In Support Of A Tumbling Financial System: A Look At The Eurosystem'S Recent Balance Sheet Policies

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  • Philipp Bagus
  • David Howden

Abstract

Attention has recently been drawn to compositional changes in the Federal Reserve System's asset holdings and in particular the deterioration of the balance sheet of the Fed in the face of the current crisis. However, an analysis of the balance sheet policies of the Eurosystem is still missing. In this article we fill this gap by analysing the Eurosystem's balance sheet during the recent subprime crisis. The calculation of certain balance sheet ratios supports the assessment that a significant decrease in the quality of money has occurred.

Suggested Citation

  • Philipp Bagus & David Howden, 2009. "Qualitative Easing In Support Of A Tumbling Financial System: A Look At The Eurosystem'S Recent Balance Sheet Policies," Economic Affairs, Wiley Blackwell, vol. 29(4), pages 60-65, December.
    • Handle: RePEc:bla:ecaffa:v:29:y:2009:i:4:p:60-65
    DOI: 10.1111/j.1468-0270.2009.01948.x
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    References listed on IDEAS

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    1. Alan S. Blinder & Michael Ehrmann & Marcel Fratzscher & Jakob De Haan & David-Jan Jansen, 2008. "Central Bank Communication and Monetary Policy: A Survey of Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 46(4), pages 910-945, December.
    2. Alan S. Blinder & Michael Ehrmann & Marcel Fratzscher & Jakob De Haan & David-Jan Jansen, 2008. "Central Bank Communication and Monetary Policy: A Survey of Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 46(4), pages 910-945, December.
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    7. repec:pri:cepsud:161blinder is not listed on IDEAS
    8. Cunningham, Thomas J, 1992. "Some Real Evidence on the Real Bills Doctrine versus the Quantity Theory," Economic Inquiry, Western Economic Association International, vol. 30(2), pages 371-383, April.
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    Cited by:

    1. Bagus, Philipp & Howden, David, 2009. "The Federal Reserve System and Eurosystem's Balance Sheet Policies During the Financial Crisis: A Comparative Analysis," MPRA Paper 79588, University Library of Munich, Germany.
    2. Rumiana GÓRSKA, 2014. "Balance Sheet of a Central Bank – A Source of Information about the Economic Position of a Country. A Comparative Study of USA and China," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 15(4), pages 497-504, October.
    3. Maria Alvarado & Laura Muro & Kirk Lee Tennant, 2011. "Europe’s Crisis of Accounting," Chapters, in: David Howden (ed.), Institutions in Crisis, chapter 5, Edward Elgar Publishing.
    4. Bagus, Philipp & Howden, David, 2016. "Central Bank Balance Sheet Analysis," MPRA Paper 79801, University Library of Munich, Germany.
    5. Gabriel A. Giménez-Roche, 2011. "Institutional Illusion and Financial Entrepreneurship in the European Debt Scheme," Chapters, in: David Howden (ed.), Institutions in Crisis, chapter 1, Edward Elgar Publishing.
    6. Bagus, Philipp & Howden, David, 2014. "Central Bank Insolvency: Causes, Effects and Remedies," MPRA Paper 79605, University Library of Munich, Germany.
    7. Bagus, Philipp & Howden, David, 2010. "The Term Structure of Savings, the Yield Curve, and Maturity Mismatching," MPRA Paper 79592, University Library of Munich, Germany.
    8. Bagus, Philipp & Howden, David, 2014. "Fiscal Considerations of Central Bank Recapitalization," MPRA Paper 79606, University Library of Munich, Germany.
    9. Malte Tobias Kähler, 2011. "From German Rules to European Discretion: Policy’s Slippery Slope," Chapters, in: David Howden (ed.), Institutions in Crisis, chapter 9, Edward Elgar Publishing.

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