Central Bank Balance Sheet

Central bank balance sheet means the list of assets and liabilities held by a central bank. In simple terms, it shows what the central bank owns and owes. A central bank balance sheet is important because its size and composition can influence liquidity, bond markets, interest rates, and financial stability. Large balance sheets often reflect past asset purchases or crisis support. For example, government bonds and mortgage-backed securities can be assets on a central bank balance sheet. A central bank balance sheet is not the same as a government budget. It belongs to the central bank and is used for monetary and financial system operations.