144 – Peter Stella on Debt, Safe Assets, and Central Bank Operations
Macro Musings with David Beckworth
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The Role of the Central Bank in Monetary Policy
In the old days, banks joined together kind of in a co-op where they would pool their reserves at the central bank. Now we're just doing it electronically. Right now, there's one balance sheet. I'll leave the US has 12 balance sheets, but that's electronically they were consolidated. So that's kind of the basic function of the central bank is to facilitate payments. And then they do the monetary policy function. They might do some legal regulation function and so on.
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