Daily Archives: January 16, 2016

Money and Banking – Part 2: Central bank balance sheet and immediate implications

By Eric Tymoigne

[Revised 1/18/16 – updated t-account images]

Post 1 reviewed basic balance-sheet mechanics. This post begins to apply them to the Federal Reserve System (Fed).

Balance Sheet of the Federal Reserve System

For analytical purpose, the balance sheet of the Fed can be presented as follows:

f1

Figure 1. A Simplified Balance Sheet of the Federal Reserve System

Continue reading