The UK central bank’s chief economist and executive director for monetary analysis and statistics offered several ways in which central bankers can conduct monetary policy during a period when interest rates are close to or below zero.
He suggested that central bankers consider making measures like quantitative easing a permanent part of their policy toolkit. However, he warned that trust in central banking could be marred as a result.
One solution, he said, would be for the Bank of England to issue a state-backed digital currency based on Bitcoin. Supporting this initiative would be a negative interest rate levied on paper currency relative to the digital currency.
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