Rethinking the Monetization Taboo

Now that the pace of the US Federal Reserve’s “tapering” of its asset-purchase program has been debated to death, attention will soon turn to prospects for interest-rate increases. But a far larger question looms: How will central banks return balance sheets swollen by unconventional monetary policy to “normal” levels?

LONDON – Now that the pace of the US Federal Reserve’s “tapering” of its asset-purchase program has been debated to death, attention will increasingly turn to prospects for interest-rate increases. But another question looms: How will central banks achieve a final “exit” from unconventional monetary policy and return balance sheets swollen by unconventional monetary policy to “normal” levels?

https://prosyn.org/12ZvIab