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The evolution of central banks' lending operations: insights from the Markets Committee Compendium

Author

Listed:
  • Hinako Kijima
  • Patrick McGuire
  • Bertrand Rime

Abstract

Central banks' monetary policy operational frameworks have evolved in response to pandemic-era interventions, the resurgence of inflation and changes in market structure. The transition to smaller balance sheets, coupled with the growing footprint of non-bank financial institutions, is having a material impact on liquidity demand. Against this backdrop, central banks have begun recalibrating their lending operations, which comprise lending facilities and open market operations that extend funds to private sector borrowers on a collateralised basis. Drawing insights from the updated Markets Committee Compendium, this article examines the key design features and trade-offs related to the counterparty access policies, the collateral framework, pricing and disclosure practices of lending operations.

Suggested Citation

  • Hinako Kijima & Patrick McGuire & Bertrand Rime, 2026. "The evolution of central banks' lending operations: insights from the Markets Committee Compendium," BIS Quarterly Review, Bank for International Settlements, June.
    • Handle: RePEc:bis:bisqtr:2606b
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    More about this item

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Systems; Standards; Regimes; Government and the Monetary System
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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