Assets of world central banks reach record

Assets of world central banks reach record Monetary expansion to revive global economy
March 14, 2016 12:14
Assets of world central banks reach record

Baku. 14 March. REPORT.AZ/ The balance sheet assets of the world's six major central banks hit a new all-time record, increasing to $16.9 trillion from $4.9 trillion 10 years ago, a 239 percent increase.

Report informs citing the U.S. National Inflation Association (NIA), the balance sheet assets of the world's six major central banks - the Federal Reserve, the European Central Bank (ECB), the Bank of Japan (BOJ), the Swiss National Bank (SNB), the Bank of England (BOE) and the People's Bank of China (PBOC) - hit $16.9 trillion in May 2015, a 239 percent increase from $4.9 trillion in balance sheet assets in May 2006. While the total assets of the aforementioned central banks reached nearly 36 percent of the combined gross domestic products (GDP) of the countries whose monetary policies they lead, this proportion was 14.3 percent in 2006.

Global markets have observed The People's Bank of China (PBOC) with caution due to concerns regarding its growth, but it has the largest balance sheet with total assets of $5.497 trillion, 52.92 percent of China's combined GDP in 2015 in comparison to 56.31 percent of China's GDP 10 years ago.

The balance sheet asset of the Fed, which has been leading the monetary policies of America, the world's largest economy, reached $4.495 trillion, equal to 25.41 percent of the country's combined GDP. This proportion was 6.17 percent in 2006.

The total assets of the Bank of Japan (BOJ) reached 70 percent of the country's GDP in 2015 with $2.834 trillion, compared to 24.27 percent in 2006.

Reducing interest rates to boost the European Zone's economy, the European Central Bank (ECB) reached $2.820 trillion in assets.

The balance sheet assets of the Swiss National Bank (SNB), which has been keeping negative national interest rates, reached $609 billion. While total assets reached 88.42 percent of Switzerland's combined GDP in 2015, it was 19.82 percent in 2006.

Analytical group of Report believes that providing liquidity to markets by central banks of developed countrie, will lead to capital flows to developing countries in short and medium term. Because in many developed countries discount rate is in minimal or negative level.It will also support global economic growth and raw materials, especially will prevent oil prices from sharp decline.

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