Journal Article
Transmission of asset purchases: the role of reserves
Abstract: The Swiss National Bank expanded bank reserves as part of its unconventional monetary policy during the European sovereign debt crisis. The unprecedented expansion involved short-term rather than long-term asset purchases. This approach provides novel insights into how central bank balance sheet expansions affect interest rates. In particular, it illustrates how an expansion of reserves can lower long-term yields through a reserve-induced portfolio balance effect that is independent of the assets purchased.
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http://www.frbsf.org/economic-research/publications/economic-letter/2015/june/unconventional-monetary-policy-central-bank-reserves-qe-interest-rates/el2015-20.pdf
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Bibliographic Information
Provider: Federal Reserve Bank of San Francisco
Part of Series: FRBSF Economic Letter
Publication Date: 2015
Order Number: 20