Central bank balance sheet reduction is difficult to execute in practice because reducing liquidity in financial markets creates unintended consequences and stress, even though reducing the balance sheet may be theoretically sound policy.
causalpending
Speaker
Michael LebowitzEvidence Quote
“that's very easy to say, but I don't think in in practice it's easy to reduce liquidity in the markets without impacting financial markets.”
Created: 8/12/2026, 6:23:20 PM
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