Balance sheet policy matters for credibility – Norges Bank paper
Researcher argues a central bank’s financial strength may affect its ability to meet its mandate
A central bank's credibility is, crucially, tied to its ability to execute balance sheet policy, a paper published by Norges Bank on July 1 argues, drawing on the Bank of England's period maintaining the gold standard.
Author Stefano Ugolini studies the period from 1889–1910 in his paper, Liquidity management and central bank strength: Bank of England operations reloaded. Ugolini notes the BoE was placed in an extraordinarily difficult situation: it was given the task of maintaining the
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