I see before me that the securities portfolio will be able to decline in the coming years, provided that the current inflation and economic assessment hold. The table indicates that one could envisage further fine tuning of the portfolio holding to affect different parts of the fixed income market. However, I think that such an approach works primarily in crisis situations, in other words in the introduction of the QE phase, when problems in certain markets need to be dealt with using particular tools. This was particularly clear in the spring of 2020. Should we sell securities? Let me now come back to the question of how we reduce our holdings when monetary policy is made less expansionary. Why do we not sell bonds before they mature instead of reducing the holding 'passively' through maturities? For example, the Bank of England has announced that it is considering actively selling certain securities before maturity when the policy rate has reached 1 per cent.20 An important difference in relation to the Bank of England is in the maturity of our bond holdings. The UK government bond has a long maturity term of on average around 15 years.21 This means that it will take a very long time before the holding decreases to any great extent if a representative sample of the bond stock has been purchased, as the Bank of England has done.
Bank of Canada (2022), “Economic progress report: Controlling inflation”, available at Economic progress report: Controlling inflation - Bank of Canada. Bank of England (2021), “Box A: The MPC’s strategy for the mix of monetary policy instruments to deliver tighter policy”, article in the Monetary Policy Report, September, available at the Bank of England Monetary Policy Report August 2021. Bank of England (2022), “Monetary Policy Summary and minutes of the Monetary Policy Committee meeting, published 5 May, available at Bank Rate increased to 1% - May 2022 | Bank of England. Breman, A. (2021), “Monetary policy after corona – we need to think in new ways”, digital speech at Swedbank, available at Breman:Monetary policy after corona – we need to think along new lines | Sveriges Riksbank. Brookings (2021), ”What does the Federal Reserve mean when it talks about tapering?”, available at What does the Federal Reserve mean when it talks about tapering? (brookings.edu). Cunliffe, Sir J. (2022), ”Learning from the Dash for Cash – findings and next steps for margining practices”, speech at FIA & SIFMA Asset Management Derivatives Forum 2022, published on 9 February, available at Learning from the Dash for Cash – findings and next steps for margining practices - speech by Sir Jon Cunliffe | Bank of England. Di Casola (2021), 'What does research say about the effects of central banks' balance sheet measures? ', Economic Commentaries No 2, Sveriges Riksbank, available at What does research say about the effects of central banks' balance sheet measures?(riksbank.se).