Central bank balance sheets: is there an optimal structure?
Establishing guidelines is challenging, although there are many reasons why CBBSes are heterogeneous
There is no agreed formula for the ideal composition of a central bank balance sheet (CBBS). This article is a primer on CBBS, and why the structure of the balance sheet differs significantly across countries.
The monetary base is often called reserve money, or base money, and denominated as M0 or central bank money. M0 primarily comprises currency-in-circulation (CiC) and required reserves (RR).
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