Quantitative easel: Bank may buy art to fight next recession

CENTRAL banks could ramp up quantitative easing in radical ways to fight future recessions; buying assets including property and art rather than just government bonds, a former top Bank of England official has argued.

Interest rates are still at low levels so central banks may have to revert to quantitative easing if there is a downturn, according to Sir Charlie Bean, who served as a deputy governor at the Bank from 2008 to 2014.

“The limits to QE are a long way off – they are when central banks have bought all of the assets in the world. Not just government debt [and] equities, but fine art, property, you name it,” Sir Charlie said in London.

“I don’t agree with the view QE is completely impotent. There is plenty of evidence to suggest it was more powerful in the worst of the financial crisis in 2009 but I’ve yet to see any empirical evidence which suggests its effect has dwindled to zero.”

His comments come after Ben Broadbent, his successor as deputy governor for monetary policy, said QE is still an effective policy.