Overview
This paper investigates the impact of the Bank of England's quantitative easing policy on UK asset prices. Based on analysis of the reaction of financial market prices and model-based estimates, we find that asset purchases financed by the issuance of central bank reserves - which by February 2010 totalled 200 billion - may have depressed medium to longterm government bond yields by about 100 basis points, with the largest part of the impact coming through a portfolio balance effect. The wider impact on other asset prices is more difficult to disentangle from other influences: the initial impact was muted, but the overall effects were potentially much larger, though subject to considerable uncertainty.
- | Author: International Journal of Central Banking
- | Publisher: Bibliogov
- | Publication Date: Sep 20, 2012
- | Number of Pages: 52 pages
- | Binding: Paperback or Softback
- | ISBN-10: 1249455049
- | ISBN-13: 9781249455042
