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The Central Bank Balance Sheet As a Policy Tool: Lessons From the Bank of England's Experience

Author

Listed:
  • Andrew Bailey

    (Bank of England)

  • Jonathan Bridges

    (Bank of England)

  • Richard Harrison

    (Bank of England)

  • Josh Jones

    (Bank of England)

  • Aakash Mankodi

    (Bank of England)

Abstract

This paper examines lessons from the previously unconventional monetary policy measures deployed since the Global Financial Crisis and the emerging evidence on policy responses to the Covid-19 pandemic in 2020. The Bank of England’s quantitative easing (QE) response to the Covid-19 shock was both large in scale and rapid in pace. The QE response also occurred against the backdrop of heightened market dysfunction, suggesting a particular form of ‘state contingency’ of QE. The paper considers some potential implications of this state contingency for future central bank balance sheet policies and the operational framework to support them.

Suggested Citation

  • Andrew Bailey & Jonathan Bridges & Richard Harrison & Josh Jones & Aakash Mankodi, 2025. "The Central Bank Balance Sheet As a Policy Tool: Lessons From the Bank of England's Experience," Journal of Financial Services Research, Springer;Western Finance Association, vol. 67(1), pages 5-30, April.
    • Handle: RePEc:kap:jfsres:v:67:y:2025:i:1:d:10.1007_s10693-024-00429-7
    DOI: 10.1007/s10693-024-00429-7
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    More about this item

    Keywords

    Monetary Policy; Financial Stability; Central Bank Balance Sheet; Quantitative Easing;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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