These lean balance sheets meant that they had an almost entirely risk-free financial position as the central bank receives interest payments on the assets while the liabilities are cost-free. In this way and if the interest rate is sufficiently high and the banknote demand sufficiently large, the central bank can fund its own operations and deliver a surplus to the state. The Riksbank and the Swiss National Bank also had relatively minimalistic balance sheets where the liability side was dominated by cost-free capital, but, apart from banknotes, these central banks had accumulated equity on the liability side. The asset side was dominated by gold and foreign exchange reserves, and the Riksbank held no government bonds at all. Despite these similarities, the Swiss National Bank had a significantly larger balance sheet than the Riksbank. This was due to both a substantially higher demand for cash in Switzerland and the fact that the Swiss National Bank had more equity. In other countries, such as Japan and New Zealand, central banks had balance sheets that were larger than was justified by the cost-free capital. The Bank of Japan had already implemented quantitative easing before to the financial crisis in order to bring up inflation. As a consequence of this, Japanese banks had liquidity reserves on the central bank balance sheet. The Reserve Bank of New Zealand had  2 [16]  a balance sheet with several large items on the liability side.
There were deposits from both banks and the state, as well as currency loans which funded some of the country’s foreign exchange reserve. There are several explanations why the balance sheets looked different in different countries. To a certain extent, it depends on the monetary policy regime. For example, the need to maintain a foreign exchange reserve may depend on whether the country has a fixed or floating exchange rate. To a certain extent, it depends on history and previous monetary policy regimes. The size of the gold reserve can often be explained by previous links between the currency and the gold, and the currency reserve can be a remnant from previous regimes with a fixed exchange rate. The way the balance sheet looks is also influenced by what tasks the central bank has and how profits and risks are distributed between the bank and its owners. 2 Figure 3 shows that many central bank balance sheets, including the Riksbank’s, have grown rapidly after the financial crisis. But how will the balance sheet develop when monetary policy is normalised? Should central banks strive for a lean balance sheet or is there reason to let balance sheets remain large? This review shows that there is no “normal” balance sheet that can be seen as an obvious benchmark. The development will instead be determined by central banks’ analysis of, for example, how the size and composition of the balance sheet interact with interest rate policy in normal times.