Interesting data and charts from the IMF on the ballooning of central bank balance sheets.
Since August 2007, the Fed’s balance sheet has increased by 221 percent, mainly through the purchase of government bonds and mortgage backed securities, with the effect of reducing long-term interest rates.
Similarly, the Bank of England (BoE) balance sheet has grown 380 percent with stepped up purchases of gilts, which have totaled 14 percent of GDP since March 2009.
The ECB’s balance sheet has expanded 241 percent through a wide range of measures, mainly long-term financing operations to the banking system.
The expansion of the monetary base in these countries has helped to offset the collapse of the shadow banking and credit contraction since the financial crisis. In the case of ECB, they’re actions late last year prevented the collapse of the European, and, ultimately, the global banking system.
(click here if charts are not observable)