Committee on the Global Financial System: Central bank asset purchases eased financial conditions during Covid-19 by improving market liquidity

  • Many central banks conducted large-scale asset purchases for the first time during the Covid-19 crisis.
  • The impact of asset purchases and relative importance of various transmission channels differed across time and economies.
  • The liquidity channel, whereby purchases improved financial market liquidity, was particularly important during the early weeks of the Covid-19 crisis.

Large scale asset purchases by central banks in response to the Covid-19 pandemic were broadly successful in addressing disruptions in monetary policy transmission and providing additional stimulus, according to a report released today by the Committee on the Global Financial System (CGFS).

In the report, the CGFS – a central bank forum for assessing risks to financial stability, hosted by the Bank for International Settlements – examines the experience of central banks in many small open and emerging market economies that conducted asset purchases for the first time during the Covid-19 crisis as well as in large advanced economies that expanded or reintroduced purchases.

The full report is available at

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