An In-Depth Look at the Balance Sheets of the European Central Bank and the Bank of England
After looking at the balance sheets of the US Fed and the Bank of Japan (BOJ) a while ago, let's take a look at the balance sheets of the European Central Bank (ECB) and the Bank of England (BOE) next. These four central banks have all dabbled in quantitative easing in recent years, so comparing their balance sheets should bring to light some interesting similarities and differences.
ECB balance sheet
Data on the ECB's balance sheet is readily available from the ECB's Statistical Data Warehouse. For the BOE, data can be found at the BOE's database. Both are conveniently covered by the pdfetch package. But since the ECB's weekly data isn't supported, we use the ecb package for ECB data instead.
Plotting the ECB's balance sheet is a breeze, thanks to the detailed documentation available on the ECB's homepage. Just like we did with the US Fed and the BOJ, we group items broadly following the categories used by the International Monetary Fund (IMF) in its International Financial Statistics. We then plot the figures using ggplot2 and plotly.
Interactive plotly chart · R script
BOE balance sheet
Making sense of the BOE's balance sheet is a bit more involved. The BOE used to publish its full balance sheet in its weekly 'Bank return'. But after the BOE money market reform in May 2006, the presentation of the data was changed. The presentation was changed again in September 2014 when the BOE introduced its 'Weekly Report', which provides more detailed coverage of some balance sheet items but shows others only at quarterly frequency and with a five-quarter delay.
We therefore look at the data from 2006 onwards (as this should allow us to see the effects of the BOE's Quantitative Easing programme) and interpolate quarterly data to weekly frequency using zoo's na.approx() function. Lastly, we break down the asset item 'Loans to Asset Purchase Facility' by distinguishing holdings of government bonds ('gilts') from loans to the private sector (e.g. the BOE's 'Term Funding Scheme').
Interactive plotly chart · R script
Links
- More information on the BOE's balance sheet from the BOE.
- An overview of unconventional monetary policies by the Bank for International Settlements.
- A previous post looking at the balance sheet of the US Fed.
- A post looking at the balance sheet of the Bank of Japan.