5 And, the short response to this could be, in my view, “yes, in normal circumstances. No, in extra-ordinary times”. That, after all, is why policy affords some discretion to the policy-maker. Slave-like adherence to an invariant policy stance is unlikely to yield optimal outcomes when circumstances change dramatically – as they have in recent times.
It has liabilities, the right-hand side of its balance-sheet, in the form of deposits that must be repaid when depositors so demand; it has assets, the left-hand side of its balance-sheet, in the form of bank loans that have some fixed points of time at which the bank can command repayments.