The reverse of QE (above), this is the process whereby a central bank will try to reverse monetary stimulus and reduce the size of its balance sheet in the process. There are several ways this can be achieved in practice – to avoid too much market disruption, one is to simply allow the bonds which …
This is the process whereby central banks create money electronically which enables them to buy government securities. This is supposed to both create new funds for the sellers of these securities and reduce demand for very safe government assets as QE pushes up their price and squeezes their yield. Where this new money ends up …
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