COMMONS

Treasury Committee calls for additional written evidence on Quantitative Easing

18 December 2012

The Treasury Committee has today called for additional written evidence to aid with its inquiry into Quantitative Easing (QE).

The Committee’s initial call for evidence (TSC calls for written evidence on the distributional effects of Quantitative Easing) focussed on the distributional effects of QE. The Committee has now identified a number of additional areas on which it would like to receive evidence.

Submissions should be limited to 3000 words, and be received by the Committee by 14 January 2013.

Mr Andrew Tyrie's comments

QE was an innovative solution to an unprecedented economic problem. Initially, it had a significant impact.

 

What role QE can play going forward, and how to handle its unwinding, are two important questions facing the Government and the Bank of England.

 

The next Governor of the Bank of England, Mark Carney, will have to give serious thought to them. We will want to question Dr Carney on this when he appears before the Treasury Committee on February 7.

Following its previous call for evidence on the distributional impact of Quantitative Easing, the Committee would welcome further evidence on:

The effectiveness of Quantitative Easing so far undertaken by the Bank of England, and how effective it would be if the programme were to be further extended in the future;

Whether other unconventional policy measures should have been used by the Bank of England;

Whether unconventional policy measures should be used from now on;

The policy issues which will need to be addressed by the time of the eventual unwinding of Quantitative Easing;

Among such issues, how the unwinding of Quantitative Easing should be co-ordinated with the management of short-term interest rates and with fiscal policy, and what cost there may be of unwinding QE;

Who should conduct the unwinding of Quantitative Easing: the Bank of England or the DMO; and

The propriety and effects of moving cash balances in the Asset Purchase Facility from the Bank of England to the Treasury.

The Committee also welcomes any further submissions on the distributional impact of quantitative easing. Submissions already received by the Committee will be used as part of this inquiry.

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