Asset Purchase Program (UK) - .NET Framework

PRELIMINARYYPFSDISCUSSIONDRAFT|MARCH2020

AssetPurchaseProgram(UK)

ArielSmith1

June29,2018

UpdatedMarch15,2020

Abstract

OnMarch5th,2009,inthewakeofthefalloutfromtheGlobalFinancialCrisis,theMonetaryPolicyCommittee(MPC)of theBankofEnglandannouncedanew,unconventionalpolicymeasure:quantitativeeasing.TheMPCdeterminedthatsimplycuttingtheBankRateinthefaceofarecessionwouldnotbeenoughtoboostspendingandincreaseinflationtomeettheBank’sgoalofa2%CPItargetinthemediumterm.Rather,overthecourseofthenextyear,theBankwouldpurchase£200billionofassets–primarilygilts–inreverseauctionsthroughanewlycreatedAssetPurchaseProgram.Afterjustunderoneyearofpurchasesandabriefhiatus, theBank revisited the program again in 2011 and purchased an additional £175billionofassets,bringingthetotalto£375billion.Forthemostpart,studiesholdthatthesetwoepisodesofpurchasing–QE1andQE2–weresuccessful,asgiltandotherassetpricesincreased and the program had an impact on inflation and GDP. However, it is hard toconclusively assert the impact of QE on the economy, as the unconventional policywasimplemented concurrently with other measures in the United Kingdom and around theworld.

Keywords:Quantitativeeasing,large-scaleassetpurchases(LSAPs),gilts,portfoliorebalancing

1ResearchAssociate,NewBagehotProject.YaleProgramonFinancialStability.ariel.smith@yale.edu


AtaGlance

Atthebeginningof2009,economicforecastsfortheUnitedKingdompredicteda recessionworse thanthatofthe1990s.Tooffsetthis,theBankofEnglandemployed conventional monetary policy andslashedtheBankRatetoitseffectivelowerbound,but predictions remained grim, and so in March2009 the Bank introduced the first episode of itsAsset Purchase Program. The stated aim of thisprogram was to increase nominal spending andbringinflationbacktoits2%target.

The Asset Purchase Program involved the practice of quantitative easing – in this case, large-scale assetpurchases primarily of government bonds (“gilts”) that targeted non-bank financial institutions, such asinsurersandpensionfunds.Thesepurchasesweremadeduringreverseauctions;atfirst,thereweretwoeachweek,andthenthreeeverytwoweekstoaccommodatemoreflexiblestandardsforasseteligibility.TheBankconcludeditsfirstepisodeofpurchasesinjustunderayearatwhichpointthepurchaseamountwasroughlyequalto30%ofgiltsheldbytheprivatesector.

InOctober2011,theBankrevitalizedtheprograminwhatisreferredtoasQE2–“quantitativeeasingtwo”–whenconcernsaroseaboutthestatusofsomeEurozoneeconomies,inflation,ashrinkingGDP,andaneedforconfidenceandgrowth.QE2wasanexplicitcontinuationofQE1andfocusedoncounteringtheeffectsoftheGFC;itexpandedtheBank’sassetpurchasesfrom£200to£375billion.

SummaryEvaluation

TheAssetPurchaseProgramisgenerallyseenaseffective,butisolatingtheimpactofthequantitativeeasingpolicy on theUnitedKingdom’s economy is difficult given concurrent domestic and international recoveryprograms.However,theprogramdidhaveatangibleimpact:purchasesloweredtheyieldsofmediumtolong-term gilts by approximately 100 basis points, and studies show that the gilt markets reacted to QEannouncements.Moregenerally, therewasaconsistent increaseinassetprices.Estimatesoftheprogram’simpactoninflationrangefrom0.75to2.5percentagepointsandGDPestimatesrangefromjustunder1.5%to2.5%.

SummaryofKeyTerms

Purpose: To stimulate the economy, boost nominalspending, and increase inflation to meet the 2%target.

AnnouncementDate March5,2009

OperationalDate March11,2009ExpirationDate November9,2012fLegalAuthority PeakUtilization £375billioninassets

Participants BankofEngland

Asset Purchase Program (UK)


I. Overview...........................................................................................................................................1II. KeyDesignDecisions....................................................................................................................41. ThepurposeoftheAssetPurchaseProgramwastoimproveliquidityincreditmarketsthatwerenotfunctioningnormallyandoffsetapredictedrecession.......................42. Assetpurchasestargetednon-bankfinancialinstitutions.......................................................43. PurchaseannouncementsoccurredeverythreemonthsduringQE1................................54. Purchasesoverwhelminglyfocusedongilts..................................................................................55. TheBankchosetointroduceanunconventionalmonetarypolicyincombinationwithconventionalmethodstorevitalizetheeconomy.......................................................................56. InAugust2009,theBanklentoutsomeofthegiltsitboughtthroughtheDebtManagementOfficeinexchangeforgiltswithreadieravailability................................................67. InAugust2009,theBankbeganpurchasingallconventionalgiltswithmaturitiesofthreeyearsormore,thusextendingthematurityofpotentialpurchases.................................78. DuringQE1,giltauctionsinitiallyoccurredtwiceaweek,butaftertheMPC’sAugust2009meeting,theauctionswerespreadovertwoweeksandtherewerethreeinsteadoftwo.79. TheBankinitiatedasecondepisodeofQEstartinginOctober2011.................................7

III.Evaluation.........................................................................................................................................7IV.References.....................................................................................................................................10V. KeyProgramDocuments..........................................................................................................12


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I. OverviewBackground

TheUnitedKingdom’seconomyfeltthefalloutoftheGlobalFinancialCrisis.BBCreporteddirefiguresinJanuary2009:GDPfellby1.5%attheendof2008,afteradropofmerely0.6%intheprecedingquarter,whichsignifiedthattheUKformallyenteredarecession–aperiodcharacterizedby“twoconsecutivequartersofnegativeeconomicgrowth”(BBC2009).ThestarkdropinGDPbetweenthetwoquarterswasthelargestonrecordsince1980.Sterling“soaredtoa24-yearlowagainstthedollar,”andtheFTSE100indexexperienceditsworstyeareverbytheendof2008(BBC2009).Manufacturingfellby4.5%,andbythestartof2009, unemployment reached 1.92 million people. The housing market and retail salessuffered;nominalspending,confidence,lendingandproductionfellsubstantially.Forecastsdidnotpredictarespite,indicatingthattherecessionwouldcontinueinto2010(BBC2009).

ProgramDescription

Inanattempt to remedy this situation, after itsmeetingonMarch5th,2009, theBankofEngland’sMonetaryPolicyCommitteeannouncedtwopolicychanges.First,itcutthebankrateto0.5%-thelowestpolicyrateintheBank’s300-yearhistory.TheMPCalsodecidedthat,duetotheextremecircumstances,cuttingthepolicyratealonewouldnotenabletheBritish economy to reach its 2% CPI inflation target in the medium term, and so itimplementedasecond,unconventionalpolicy:quantitativeeasing(QE)(Fisher2010).

ThepolicyofQEentailed large-scaleassetpurchases financedby theBankofEngland tostimulate theeconomyandreachthe inflationtarget.TheAssetPurchaseProgram(APP)wascreatedinJanuary2009topurchaseassetsfundedbyTreasurybills,butwouldnowbeusedasatoolofmonetarypolicytransmission(Benfordetal.2009).

Under the program, the APP primarily purchased UK government bonds, or “gilts,” andpurchases were targeted towards assets held, predominantly, by non-bank financialinstitutions,suchasinsurersandpensionfunds(Joyceetal.2011).

The giltswere purchased via reverse auctions conducted by theAsset Purchase Facility.These auctions were multiple-price (discriminatory) reverse auctions “with bothcompetitive and non-competitive elements,” meaning that “competitive” bidders “couldsubmitmultiplebidsofbothpriceandquantity.Thenoncompetitivebidswereallocatedinfullattheweightedaverageacceptedpricesetinthecompetitiveauction;purchasesthroughthisnoncompetitiveprocesswerecomparativelyverysmallandaccountedforonly1%ofthetotal[giltspurchased]”(JoyceandTong2012).

Purchasesproceededwithtwoauctionseachweek.Thefirstoftheseauctionsdealtwithgiltswitharesidualmaturitybetween5-10yearsandtheseconddealtwithgiltswitharesidualmaturityofbetween10-25years.TheBankboughtgiltsof£4billionormoreinissuesize“except those thathadbeenorwouldbe issuedby theDebtManagementOfficewithin7days”(JoyceandTong2012).


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OnMarch5th,2009,theMPCannouncedthattheAPPwouldpurchase£75billionofassetsover the course of the next threemonths. These purchases began on the 11thwith gilts,followedbythefirstpurchasesofcorporatebondsonthe25th.InMay2009,andthenagaininAugust2009, theMPCannounced that theAPPwouldbuyanadditional£50billionofassets.BytheendofJune,“theBankbegantoexcludefromtheauctionsgiltswhereholdingswereatornear70%ofthefreefloatsoastonotnegativelyimpacttradingconditionsandliquidity”(JoyceandTong2012).InNovember,theMPCannouncedthatthetotalamountofpurchases made under the QE program would reach £200 billion (adding in theannouncementthattherewouldbeafinalthree-monthpurchasingperiodof£25billiontowrapuptheprogram).TheBankstoppeditspurchasesinFebruary2010afteralmostonefullyear(JoyceandTong2012).AtapressconferenceonFebruary10thMervynKingnotedthatfutureQEwasapossibilityandwhetherornottheprogramwasrevivedwoulddependonthe“outlookoninflation.”

AtitsmeetingheldoverAugust5thand6th,2009,theBankdecidedtoextenditspurchasesto all gilts with a residualmaturity ofmore than three years. In order to deal with theincreasedpurchasingcapacityoftheAPP,itaddedathirdauction,whichmeanttherewasnowa3-10yearauction,a10-25yearauction,anda25+yearauction.ItalsobeganagiltlendingprogramwiththeDebtManagementOffice(JoyceandTong2012).

InNovember2009,theBankspreadthesethreeauctionsovertwoweeksratherthanoneuntilitreached£200billionofpurchasesinJanuary.Bytheendoftheprogram,theAPPhadfacilitated 92 reverse auctions. “The size of the auctions reduced over time…Cover wasgenerallyhigher for theshortermaturityauctions than for the longermaturityones,andtherewasadeclineover time in the spreadbetween themaximumandminimumyieldsaccepted in each auction. The asset purchases at the end of the first episode (QE1)representedalmost30%oftheamountofoutstandinggiltsheldbytheprivatesector”(JoyceandTong2012).

Inreactiontoconcernsabout“macroeconomicimbalances”intheEurozone,andinordertooffsetaforecastofplunginginflationandshrinkingGDP2,theBankofEnglandrestartedtheQEprogram(termedQE2)fromOctober2011untilJuly2012witharevisedpurchasetargetof£375billion(total,includingQE1)(Haldaneetal.2016).

ThroughoutthesecondepisodeofQE,theBankremainedfocused,asithadduringQE1,onpurchasingfromnon-bankfinancialinstitutionsbytargetingassetstypicallyheldbytheseinstitutions. However, “it also made smaller-scale purchases of high-quality commercialpaperandcorporatebonds,actingasa‘backstop’buyerandsellertoimprovethemarket.Thus,theBank’spurchaseswerenotprimarilytargetedatmanagingliquidity,butrathertoboostthepricesofassets,particularlyonbondsissuedtofinancelendingtohouseholdsandcompanies”(Joyceet.al.2011).ThefollowingfiguresbreakdowntheBank’spurchasesofgilts,commercialpaper,andcorporatebonds.

2Trackdownspecificcitationforthis.


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Figure1:Cumulativepurchasesofcommercialpaperandcorporatebonds

Source:Joyceetal.2011.

Figure2:Cumulativegiltpurchasesbymaturity



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Outcomes

AftertheendofQE1during2009-2010,theBankofEngland’sbalancesheetshowedthreetimestheamountofGDPcomparedtopre-crisislevels,andtheamountofassetspurchasedduring the first episode came to about 14%of theUK’s GDP. By the program’s end, CPIinflationhoveredat3%,comparedto5.2%inSeptember2008and1.1%inSeptember2009,according to the Office for National Statistics (Tucker 2017). GDP began to rise at thebeginningof2009“andfollowsthattrendtodate”(Scruton2017).

QE2wasconductedbetweenOctober2011andJune2012.TheBankpurchasedanadditional£175 billion of purchases – roughly 11% of GDP at the time. By the end of this secondinstallment,CPIinflationwasat2.6%andGDPwasincreasing(Tucker2017,Scruton2017).

II. KeyDesignDecisions1. ThepurposeoftheAssetPurchaseProgramwastoimproveliquidityincredit

marketsthatwerenotfunctioningnormallyandoffsetapredictedrecession.

Atthebeginningof2009,economicforecastsfortheUnitedKingdompredictedarecessionworse than thatof the1990s.Tooffset this, theBankofEnglandemployedconventionalmonetary policy and slashed theBankRate to its effective lower bound, but predictionsremained grim, and so inMarch 2009 theBank introduced the first episode of its AssetPurchaseProgram.Thestatedaimofthisprogramwastoincreasenominalspendingandbringinflationbacktoits2%target.

Therefore,onMarch5th,2009,theMPCannouncedthattheAPPwouldpurchase£75billionofassetsoverthecourseofthenextthreemonths.

2. Assetpurchasestargetednon-bankfinancialinstitutions.

Morespecifically, thepurchaseswereprimarily targetedat life insurancecompaniesandpension funds,whichwere known for holding long-term gilts. However, these gilts onlyrepresentedasmallamountoftheinstitutions’portfolios,“whichindicatedthattheymightbepreparedtoreinvestmoneyfromgiltsalesintootherassets”;thiswouldleadtotheBank’sportfoliorebalancingchannel(Joyceetal.2011).

The Bank’s plan for quantitative easing involved five channels throughwhich QEwouldimpact the economy: money, liquidity, portfolio rebalancing, policy signaling, andconfidence,whichwouldoperateintandemtoachievetheprogram’sdesiredresults(Joyceetal.2011).

Additionally,byoperatinginthisway,QEavoideddirectlytargetingbanks,as“anyimpactonbankswasthoughtlikelytobesmallduetothedesiretodeleverage”(Haldaneet.al2016,Joyceet.al2011,Joyce2013).


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3. PurchaseannouncementsoccurredeverythreemonthsduringQE1.

The Bank periodically disclosed how much it would continue to purchase through theprogram,whichhelpedtomaintainorderinthemarkets(Joyceet.al2011).

4. Purchasesoverwhelminglyfocusedongilts.

Thiswasduetoatradeoffinprioritiesbetweenimprovingmarketconditionsandincreasingnominal demand. The Bank prioritized the latter; additionally, “buying primarily privatesectorassetsmeansthatthegovernmentchoosestoactinspecificsectorsoreveninspecificcompanies,whichcandistorteconomicactivity.Buyinggiltsincreasestheamountofmoneyinamore‘economicallyneutral’way”(Lilico2011).

5. TheBankchosetointroduceanunconventionalmonetarypolicyincombinationwithconventionalmethodstorevitalizetheeconomy.

Lowering the interest rate so near to its effective lower boundwas already a significant“loosening”ofwhatwasconsideredconventionalmonetarypolicy.However,inthefaceofagrowingfinancialcrisisand“oneofthelargestfallsinoutputeverrecordedintheUK…Therewas a consensus amongmembers of theMPC that this loosening of conventional policywouldnotbeenoughtocombattheGFC,andsotheBankoptedtocombineconventionalmonetarypolicywiththeunconventionalmethodofquantitativeeasinginthehopesthattheeffectsofthetwostrategieswouldgivetheeconomytheboostitneeded”(Fisher2010).

The Bank’s plan for quantitative easing involved five channels throughwhich QEwouldimpact the economy: money, liquidity, portfolio rebalancing, policy signaling, andconfidence,whichwouldoperateintandemtoachievetheprogram’sdesiredresults(Joyceetal.2011).

Figure3:StylizedtransmissionmechanismofQE


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Source:Haldaneetal.2016.

The first channel was portfolio rebalancing, which was considered to be particularlyimportant.Bywayofthischannel,“centralbankassetpurchasespushupthepricesofassetsbought, alongwithotherassets…higherassetpricesmean loweryields, lowerborrowingcosts…[and]anincreaseinnetwealthofassetholders…whichstimulate[s]spending”(Joyceetal.2011).

Thesecondchannelwasliquidity,whichQEwouldachieveby“activelyencouragingtrading”(Joyceetal.2011).However,theeffectivenessofthischannelmaybelimitedtotheperiodoftimeinwhichthecentralbankisactivelymakingpurchases.Assuch,“thischannelwasnotexpectedtobeveryimportantintermsofgiltpurchases–instead,itwould[focus]ontheBank’s(relatively)small-scalepurchasesofprivatesectorassetsanddirectlyimprovetheavailabilityofcapitalmarketfinancetocompanies”(Joyceet.al2011).

Thethirdchannelwasconfidence.ConsumerswouldseetheBank’swillingnesstoemployunconventional monetary policy andwould becomemore certain aboutmarket outlook(Joyceetal.2011,Haldaneetal.2016).

Thefourthchannelwasmoney.QEexpandedthebalancesheet,loosenedthemoneysupply,andfacilitatedbanklending(Joyceetal.2011,Haldaneetal.2016).

Thefifthandfinalchannelwaspolicysignaling.ThemethodsbywhichQEwasconductedprovided informationtoeconomicparticipantsabout“potential futurepathsofmonetarypolicy”andwouldthusinformthoseparticipants’futureactions(Joyceetal.2011).

Finally, theBank’splan includeda two-stepprocess throughwhichQEwould impact themacroeconomy.

Thefirst“impact”phaseinvolvedportfoliorebalancing–whenreinforcedbypolicysignalingandariseinassetprices,thiswouldinturnfosterdemand.Thesecond“adjustmentphase”wouldlessentheimbalancebetweenmoneyandassetmarkets,“andpricelevelwouldslowlyincreaseuntil it restored realmoneybalances, real asset prices, and real output to theirdesiredlevels”(Joyceetal.2011).

6. InAugust2009,theBanklentoutsomeofthegiltsitboughtthroughtheDebtManagementOfficeinexchangeforgiltswithreadieravailability.

DuringQE1,theBankpurchasedalargeproportionofcertaingiltsinissue,whichcreatedriskthatsectionsofthegiltmarketwouldbecomedislocated.BylendingoutsomeofthegiltspurchasedtheBankwasabletolessenthatrisk.TheBankdeliberatelydidnotlendoutthegiltsagainstcash,as “thatwouldreversesomeof theeffectsof the firstassetpurchases”(Joyce et. al 2011). This scheme successfully alleviated issueswithin the giltmarket andmarket contacts reported that “the spreadbetween repo rates and the general collateralsecuredratesomewhatnormalizedforthetypesofgiltsthathadbeenheavilyaffectedbytheBank’spurchases”(JoyceandTong2012).


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7. InAugust2009,theBankbeganpurchasingallconventionalgiltswithmaturitiesofthreeyearsormore,thusextendingthematurityofpotentialpurchases.

Overthecourseoftheprogram,theBankhadcometoholdalargeproportionofgiltsinissueatthe5-25yearmaturityrange,andthiswasanotherstrategicmeasuretoavoiddislocationofthegiltmarket(Joyceet.al2011).

8. DuringQE1,giltauctionsinitiallyoccurredtwiceaweek,butaftertheMPC’sAugust2009meeting,theauctionswerespreadovertwoweeksandtherewerethreeinsteadoftwo.

ThiswasdonetoaccommodatethenewlyenlargedpurchaserangementionedaboveinKeyDecision6(JoyceandTong2012).

9. TheBankinitiatedasecondepisodeofQEstartinginOctober2011.

QE was not explicitly planned to be a recurring event; but “amid fears of a double-diprecession and a crisis in the Eurozone,” the Bank resumed the program. In a statementreleasedonthe6thofOctober,theBankdetaileditsstrategy:“Thepaceofglobalexpansionhas slackened, especially in the United Kingdom’s main export markets. Vulnerabilitiesassociatedwiththeindebtednessofsomeeuro-areasovereignsandbankshaveresultedinseverestrainsinbankfundingmarketsandfinancialmarketsmoregenerally.ThesetensionsintheworldeconomythreatentheUKrecovery”(Allen2011,TheTelegraph2011).

III. Evaluation

Themajorityofexistingliteratureholdsthatquantitativeeasingdidhaveapositiveeffectontheeconomyof theUnitedKingdom.However,uncertaintyexistsas tohowmuchand inwhatways,asitisbothhardtocreatereliablecounterfactualsandtoisolatethepolicyofQEfromothereconomicrecoveryprogramsimplementedbothdomesticallyandinternationallyat the same time. In addition, it has been estimated that “the degree of uncertaintysurroundingthemacroeconomiceffectsofassetpurchasesisatleasttwiceaslargeasthatforconventionalmonetarypolicy”(Haldaneet.al2016).

ThereareafewmaincategoriesthatstandoutintheexistingattemptstoquantifytheimpactofQEontheUnitedKingdom’seconomy.Thefirstoftheseistheimpactofassetpurchasesongiltpricesandotherassetprices.

ThereisageneralconsensusthatQEassetpurchaseshad“asignificantandpersistentimpactongiltyields.”Joyceetal.lookedatthemarketreactionstotheseparateQEannouncementsandfoundthatthebiggestreactionoccurredbetween15and20-yearmaturities,withupto120basispoints(JoyceandTong2012).

AnotherexaminationbyJoyceetal.oftheannouncementeffectsofQEduringthefirstwaveof auctions found that the purchases lowered medium to long-term gilt yields byapproximately100basispoints(Joyceetal.2011).


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Duringthefirstwaveofpurchases,fromMarch2009throughMarch2010,assetpricesrosesteadily. This trend occurred simultaneously along with a general rise in asset pricesinternationally, as other countries employed similar programs (Joyce et al. 2011). OneestimatebyBridgesandThomasplacestheincreaseinassetpricesataround20%(BridgesandThomas2012).Figure4providesanoverviewof thevariousassetpricemovementsduringtheQEepisodes.

Figure4:SummaryofassetpricemovementsoverQEepisodes

Source:Joyce2013.

Theeffectivenessoftheportfoliorebalancingchanneliscorroboratedbyotherdata,whichshowsthatadecreaseingiltyieldsaftertheQEannouncements(asseeninFigure5,below)did not occur along with a decrease in interest rates from OIS contracts; “this lack ofmovementindicate[d]thatthelargefallingiltyields[couldnot]beprimarilyattributedtosignalingoffuturepolicyratesormacroeconomicnews”(Joyceet.al.2011).

Figure5:Announcementimpactongiltyields,OISratesandgilt-OISspreads


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Additionally,duringQE1,sterlinginvestment-gradecorporatebondyieldsdecreasedbyanamountthatparalleledthedecrease ingiltyields.However, in total, theyieldsofsterlinghigh-yieldcorporatebondsdecreasedbyanaverageof150basispointsoverthecourseofthe sixQE announcements. Finally, corporate bond and equity issuance rosedue toQE1(Joyceet.al2011).

ThesecondcategoryanalyzingtheimpactofQEexaminesinflation.Joyceetal.2011usedaPhillipscurverelationshiptodeterminetheimpactofQEoninflationandfoundanimpactofbetweenapproximately0.75to2.5percentagepoints.AnotherstudybyKapetaniosetal.2012 estimated a peak impact on annual CPI inflation of approximately about 1.25percentagepoints.

The third category looks at QE’s estimated impact on GDP. Of the existing studies thatexaminethis,onecitesQE’speakimpactonthelevelofrealGDPasbetween1.5%and2.5%(Joyceetal.2011),andtheothercitesitasaround1.5%(MeaningandWarren2015).WealeandWieladek(2016)conductedaStructuralVectorAuto-Regression(SVAR)approachandconcludedthattheQEprogrammayhavefosteredariseinGDP.

However, there isadissentingvoiceamongst theexisting literature:LyonettandWerner(2012), who argue that “QE as defined and announced inMarch 2009 had no apparentimpact on the UK economy.” They use the “Hendry” form of econometric modeling toexaminethe impactofQEonGDP,andconcludethat theBankofEnglandshould insteadfocusonthe“growthofbankcredit forGDPtransactions,”citingthefactthatbankcreditgrowthfellby“recordamounts”inlate2011.


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Finally, most studies that examine the macroeconomic effects of QE conclude that itsuccessfullyallowedtheUKtoavoidpotentfuturerisksofdeflationand“outputcollapses”(BridgesandThomas2012,AshworthandGoodhart2012,BaumeisterandBenati2013).

ItisclearthatQEhadanimpact.AstudybyJoyceetal.2011concludesthatthepolicyhad“economicallysignificanteffectsequivalenttoa150to300basispointcutinthebankrate.”

IV. References

Allen, Katie. “Quantitative easing boosted by £75bn by Bank of England.”The Guardian,October 6, 2011. Accessed August 2, 2017.


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https://www.theguardian.com/business/2011/oct/06/quantitative-easing-75bn-bank-of-england.

BBC News. “UK in recession as economy slides,” January 23, 2009.http://news.bbc.co.uk/2/hi/business/7846266.stm.

Benford, James,StuartBerry,KalinNikolov,ChrisYoung,andMarkRobson.“Quantitativeeasing.” The Bank of England Quarterly Bulletin 49(2), 90-100.https://search.proquest.com/docview/215030543?accountid=15172.

Fisher,Paul.“Anunconventionaljourney:theBankofEngland’sassetpurchaseprogramme.”Speech, Stonehouse Court, Gloucestershire, October 11, 2010. Bank of England Archive.http://www.bankofengland.co.uk/archive/Documents/historicpubs/speeches/2010/speech453.pdf

Haldane,AndrewG.,MattRoberts-Sklar,TomaszWieladekandChrisYoung.“QE:thestoryso far.” The Bank of England Staff Working Paper No. 624 (2016).http://www.bankofengland.co.uk/research/Documents/workingpapers/2016/swp624.pdf

Joyce,Michael. “TheBankofEngland’sunconventionalmonetarypolicies:why,whatandhow.” ECB Workshop on Non-standard Monetary Policy Measures, June 18, 2013.https://www.ecb.europa.eu/events/pdf/conferences/130607/PanelDiscussion_joyce.pdf?9b7c697afa3b9dce804543b2b4538d5b.

Joyce,Michael,andMatthewTong.“QEandthegiltmarket:adisaggregatedanalysis.”TheEconomic Journal Vol. 122 (2012): 348-384.file:///C:/Users/aas226/Downloads/Joyce_et_al-2012-The_Economic_Journal%20(1).pdf

Joyce, Michael, Matthew Tong, and Robert Woods. “The United Kingdom’s quantitativeeasing policy: design, operation, and impact.”BISQuarterly BulletinQ3 (2011): 200-212.http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/qb110301.pdf

Lilico,Andrew. “Quantitative easingby theBankofEngland:printingmoremoneywon’twork this time.” The Telegraph, October 6, 2011.http://www.telegraph.co.uk/finance/financialcrisis/8811210/Quantitative-easing-by-the-Bank-of-England-printing-more-money-wont-work-this-time.html

Lyonett,Victor,andRichardWerner. “Lessons fromtheBankofEnglandon ‘quantitativeeasing’ and other ‘unconventional’ monetary policies.” International Review of FinancialAnalysisVol.25(2012):94-105.

Meaning,Jack,andJamesWarren.“ThetransmissionofunconventionalmonetarypolicyinUKgovernmentdebtmarkets.”NationalInstituteEconomicReviewNo.234(2015):40-47.http://journals.sagepub.com/doi/pdf/10.1177/002795011523400105.

Scruton, James. “GrossDomestic Product: chained volumemeasures: seasonally adjusted£m.” Office for National Statistics. July 26, 2017.https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/abmi/pgdp.


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Sheffield,Hazel. “BankofEngland’sBrexitplan topropup theeconomywithQE failsonsecond day.” The Independent, August 10, 2016. Accessed August 2, 2017.http://www.independent.co.uk/news/business/news/brexit-bank-of-england-qe-bonds-gilts-pensions-mark-carney-interest-rates-vat-a7182256.html.

TheTelegraph.“BankofEnglandincreasesstimulus:fulltextofstatement,”October6,2011.http://www.telegraph.co.uk/finance/economics/8810957/Bank-of-England-increases-stimulus-full-text-of-statement.html.

Tucker, James. “UK consumer price inflation: Jan 2017.” Office for National Statistics.February 14, 2017.https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/jan2017.

Weale, Martin, and Thomas Wieladek. “What are the macroeconomic effects of assetpurchases?”JournalofMonetaryEconomics.Vol.79(2016):81-93.

V. KeyProgramDocumentsSummaryofProgram

ComparativeStudyofCentralBankQuantitativeEasingPrograms(Agostiniet.al.2016)–literature reviews of existing studies on quantitative easing.https://sipa.columbia.edu/sites/default/files/FRBNY_Comparative%20Analysis%20of%20Central%20Bank%20QE%20Programs.pdf

TheBankofEngland’sunconventionalmonetarypolicies:why,whatandhow(Joyce2013)– presentation taken from ECB workshop on non-standard monetary policy measures.https://www.ecb.europa.eu/events/pdf/conferences/130607/PanelDiscussion_joyce.pdf?9b7c697afa3b9dce804543b2b4538d5b

ImplementationDocuments

Quantitative Easing (6/12/2009) – Quarterly Bulletin released by the Bank of Englandexplaining the new policy after its introduction.http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/qb090201.pdf

Letter from the Chancellor to the Governor (1/29/2009) –Letter from the Chancellor toMervyn King on the creation of the Asset Purchase Facility and its purpose.http://www.bankofengland.co.uk/monetarypolicy/Documents/pdf/apfchancellorletter090129.pdf

MinutesoftheMonetaryPolicyCommitteeMeeting(3/4&5/2009)–MinutesfromtheMPCmeeting discussing the debate over asset purchases and how they should be structured.http://www.bankofengland.co.uk/publications/minutes/Documents/mpc/pdf/2009/mpc0903.pdf


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Legal/RegulatoryGuidance

PressReleases/Announcements

BankofEnglandcutsBankRateto0.25%andintroducesapackageofmeasuresdesignedtoprovide additional monetary stimulus (8/4/2016) – Bank of England monetary policysummary.http://www.bankofengland.co.uk/publications/minutes/Documents/mpc/mps/2016/mpsaug.pdf

Quarterly inflation reportpress conference (2/10/2010)– interviewwithMervynKing inwhich he talks about the future of QE, among other matters.http://www.bankofengland.co.uk/publications/Documents/inflationreport/conf100210.pdf

Speech given by Mervyn King, Governor of the Bank of England (1/20/2009) – speechdetailing the economic situation and what the Bank is considering to ameliorate it.http://www.bankofengland.co.uk/archive/Documents/historicpubs/speeches/2009/speech372.pdf

Inflationreportpressconference,openingremarksbytheGovernor(2/11/2009)–speechgiven by Mervyn King explaining the large reduction in Bank Rate.http://www.bankofengland.co.uk/publications/Documents/inflationreport/irspnote110209.pdf

Inflationreportpressconference,openingremarksbytheGovernor(8/12/2009)–speechgiven by Mervyn King explaining the use of QE, maintaining the Bank Rate at 0.5%, andincreasing the asset purchase program.http://www.bankofengland.co.uk/publications/Documents/inflationreport/irspnote120809.pdf

QE–oneyearon(3/12/2010)–speechgivenbySpencerDale,executivedirectorandchiefeconomist of the Bank of England, at a conference.http://www.bankofengland.co.uk/archive/Documents/historicpubs/speeches/2010/speech428.pdf

MediaStories

UKinrecessionaseconomyslides(BBC–1/23/2009)–articlewithfactsandfiguresontheUKeconomypre-QE.http://news.bbc.co.uk/2/hi/business/7846266.stm

KeyAcademicPapersQuantitative Easing and unconventional monetary policy – an introduction (Joyce et. al.2012)–articleexaminingtheimpactofQEandotherunconventionalmonetarypoliciesasusedby central banks in the wake of the GFC.https://pdfs.semanticscholar.org/ebce/ee0b46de5ae81d271f0cd9f41f9bde7a0aa5.pdf


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Panacea,curse,ornonevent?UnconventionalmonetarypolicyintheUnitedKingdom(Meier2009) – working IMF paper discussing the “moderately encouraging” effects of QE.https://www.imf.org/en/Publications/WP/Issues/2016/12/31/Panacea-Curse-or-Nonevent-Unconventional-Monetary-Policy-in-the-United-Kingdom-23161

Unconventionalmonetary policies: an appraisal (Borio andDisyatat 2010) –article thatcreatesaframeworkforclassifyingandexaminingunconventionalmonetarypolicieswithinalarger context of monetary policy implementation.http://onlinelibrary.wiley.com/doi/10.1111/j.1467-9957.2010.02199.x/epdf

Reports/Assessments

AssessingtheEconomy-wideEffectsofQuantitativeEasing(Kapetanioset.al.2012)–articleexaminingthemacroeconomicimpactofthefirstroundofquantitativeeasingintheUnitedKingdom.http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0297.2012.02555.x/full

The Response of Interest Rates to US and UK Quantitative Easing (Christensen andRudebusch 2012) – article analyzing declines in government bond yields after QEannouncements in both the US and the UK.http://cepr.org/sites/default/files/events/1854_CR_EJ_2012.pdf

Evaluating Asset-Market Effects of Unconventional Monetary Policy: A Cross-CountryComparison (Rogers et. al. 2014) – article examining effects of unconventional monetarypolicy, including QE, taken by four banks, including the Bank of England.https://www.federalreserve.gov/Pubs/IFDP/2014/1101/ifdp1101.pdf

Unconventional monetary policy and the Great Recession: estimating the impact of acompressionintheyieldspreadatthezerolowerbound(BaumeisterandBenati2013)–article lookingat themacroeconomiceffectsofQEwhen thepolicyrate isat itszero lowerbound.http://www.ijcb.org/journal/ijcb13q2a9.pdf

QE: a successful startmaybe running intodiminishing returns (Ashworth andGoodhart2012) – article examining the impact of QE1 on UK GDP.https://academic.oup.com/oxrep/article/28/4/640/344420/QE-a-successful-start-may-be-running-into

TheimpactofQEontheUKeconomy–somesupportivemonetaristarithmetic(BridgesandThomas2012)–workingpaperthatusesamoneydemandandsupplyframeworktoestimatethe impact of QE on asset prices and nominal spending.http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.231.4153&rep=rep1&type=pdf