Institution: The Federal Reserve under the leadership of Jerome Powell can learn from the practices of the Bank of England to stabilize balance sheet reduction
Laurence Mutkin, EMEA interest rate strategy head at Bank of Montreal (BMO), believes that the Federal Reserve Chairman nominee Kevin Walsh (after being confirmed by the U.S. Senate and taking office) can draw lessons from the Bank of England's experience in reducing its balance sheet without disturbing the market.
The Bank of England successfully reduced the size of its bond portfolio by nearly half over four years without causing significant market disruptions, which included providing ample liquidity support: the Bank of England launched short-term liquidity tools - Short-Term Repo (STR) and Indexed Long-Term Repo (ILTR)
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