The central banks of large and emerging market economies have recently gone through a period of extraordinary expansion of balance sheets. Currently, they are all now possibly facing a transition to less abnormal times. The fact that one group, however is comprised by global reserve issuers and the other by bystanders receiving impacts of the former’s policies carries substantively different implications. Furthermore, using Brazil and the U.S. as examples, the paper also illustrate how the relationships between central bank and public sector balance sheets have acquired higher levels of complexity, risks and opacity.
