The Treasury and the Bank of England will try and jump-start the British economy through coordinated action to cut costs for banks and boost lending. The BOE is moving from a focus on money creation to a focus on credit expansion.
This shift in emphasis is part of the larger research shift from money to credit intermediation as the key to central bank activity. The Chancellor of the Exchequer, George Osborne, stated that there will be more for monetary policy to do to help the economy. The BOE will activate sterling liquidity facility.
The BOE will be the advanced guard of innovative monetary policy in other countries. We expect that the Fed, ECB, and BOJ will all follow the same strategy as the Bank of England. The timing may be difficult, but it sis still likely that this move to further credit expansion will be necessary to offset fiscal austerity.
This shift in emphasis is part of the larger research shift from money to credit intermediation as the key to central bank activity. The Chancellor of the Exchequer, George Osborne, stated that there will be more for monetary policy to do to help the economy. The BOE will activate sterling liquidity facility.
The BOE will be the advanced guard of innovative monetary policy in other countries. We expect that the Fed, ECB, and BOJ will all follow the same strategy as the Bank of England. The timing may be difficult, but it sis still likely that this move to further credit expansion will be necessary to offset fiscal austerity.
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