On the Transactions Costs of UK Quantitative Easing
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Volume
88
Pagination
347 - 356 (9)
Publisher
Publisher URL
DOI
10.1016/j.jbankfin.2017.12.012
Journal
Journal of Banking and Finance
ISSN
0378-4266
Metadata
Show full item recordAbstract
Most quantitative easing programmes primarily involve central banks acquiring government liabilities in return for central bank reserves. In all cases this process is undertaken by purchasing these liabilities from private sector intermediaries rather than directly from the government. This paper estimates the cost of this round-trip transaction – government issuance of liabilities and central bank purchases of those liabilities in the secondary market – for the UK. I estimate that this cost amounts to about 0.5% of the total value of QE (over £1.8 billion in my sample). I also find some evidence that this figure is inflated by the unusual design of UK QE operations.
Authors
BREEDON, FJCollections
- Economics and Finance [371]