Supporting markets in tough times

With great power comes great responsibility

When we act as lender of last resort, we must guard against moral hazard—unnecessary risk-taking by those who believe they will be protected from the consequences.

When we help financial markets and institutions in times of crisis, we must do it in a way that doesn’t encourage market participants to engage in excessively risky behaviour once things return to normal. So it’s important to dial back the programs and tools that we use to support the economy once they’re no longer needed.

That’s why we started adjusting our programs last autumn as conditions improved.

Some of the shorter-term debt we purchased has already matured and no longer appears on our balance sheet. As a result, we expect our balance sheet to decline to about $475 billion by the end of April. And over the spring, we will suspend or discontinue a number of the programs that we put in place to support markets during the crisis.