The Bank’s current asset purchase policy, which continuously increases the amount outstanding of its asset holdings, has the effect, by its nature, that as long as the Bank continues with the purchases, accommodative financial conditions will be strengthened in a cumulative manner as the amount outstanding of its asset holdings increases.
Unless other expenditure items are also cut, it will not be possible, however, to use the power to enact tax and welfare reforms to complete the adjustment in 2013–14 without raising taxes.