Benoît Cœuré: A tale of two money markets - fragmentation or concentration

Speech by Mr Benoît Cœuré, Member of the Executive Board of the European Central Bank, at the European Central Bank workshop on money markets, monetary policy implementation and central bank balance sheets, Frankfurt am Main, 12 November 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Since the outbreak of the global financial crisis, central banks have injected a huge amount of liquidity into the financial system. The monetary policy assets on the Eurosystem's consolidated balance sheet, for example, have expanded from around €0.5 trillion on the eve of the crisis in July 2008 to nearly €3.3 trillion at the end of September this year.

Not all of the expansion in central bank balance sheets reflects direct monetary policy actions, however. Part of it relates to regulatory factors, as I will explain shortly in more detail. And part of it relates to autonomous factors, such as the steady increase in the demand for banknotes.