Central Banks

Australia – Reserve Bank might fund mortgages during the next recession

This in the press here in Australia this morning – described as  “personal thoughts” from Dr. Leon Berkelmans,  who works at the Bank (i.e. this is not RBA policy)

  • said it might be possible to cut the cash rate below zero
  • As a “thought experiment” he outlined the options available to the bank, although he stressed it had no official position and to the best of his knowledge hadn’t wargamed what it might do.
  • “Let me be very clear,” he said. “The Reserve Bank is not planning on engaging in quantitative easing anytime soon, so please do not form the impression that at the next board meeting they will be discussing it. They will not.”

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