When introducing quantitative easing, the Bank adopted a new framework for market operations according to which it would increase the amount of its outright purchase of long-term JGBs when it considered such an increase necessary for the smooth provision of liquidity, subject to the limitation that the outstanding amount of long-term JGBs effectively held by the Bank should be kept below the outstanding balance of banknotes issued.
3 Objective function The modern science of monetary policy proceeds under the assumption that the central bank's purpose is to maximize the well-being of households in the economy; the objective function specifies exactly what should be maximized.