In credit easing, central banks purchase private assets such as corporate bonds. How do central banks choose which corporate bonds to buy? If the central bank buys bonds of one company but not those of another, wouldn't that result in allegations of favoritism? How do central banks choose which private assets they are going to buy without causing allegations of unfair treatment?

  • $\begingroup$ I don't feel qualified to answer but this is apparently the agreement that the US Fed made with BlackRock to handle a recent program of corporate bond purchasing. $\endgroup$ – Brian Z May 29 '20 at 13:27
  • $\begingroup$ That's why the Fed buys bond ETF's, which gives exposure to a basket of bonds (of certain credit rating), not individual bonds. $\endgroup$ – Michael May 31 '20 at 1:31
  • $\begingroup$ @Michael If the central bank buys one bond ETF but not another, it increases the asset under management (AUM) of the chosen bond ETF but not the AUM of the other. This could also result in allegations of favoritism. $\endgroup$ – Flux Jul 14 '20 at 12:24

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