The Case For People's Quantitative Easing by Frances Coppola

Author:Frances Coppola
Language: eng
Format: epub
ISBN: 9781509531325
Publisher: Wiley
Published: 2019-09-16T00:00:00+00:00

2. National Investment Banks

Central banks can also finance public investment projects via National Investment Banks (NIBs). For countries that prohibit central bank financing of government, this could be a good way of providing central bank support for long-term public investment. The NIB would issue bonds to the market, which the central bank would buy either as part of a QE programme or simply in the course of day-to-day open market operations. As the NIB would be separate from government, the central bank could additionally buy part or all of a primary bond issue, which it could either hold to maturity or sell in the course of normal monetary operations. As with direct government financing, a large quantity of NIB bonds on the central bank’s balance sheet could impede its ability to control inflation if there was a political expectation that the central bank would always keep NIB bond yields low.

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