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The BoE creates money to lend to NR for paying off debt owed to bank A this doesn't really change the money supply but it shifts the loan from A's assets to the BoE's assets.

Now, why is it not a problem for the BoE if NR then defaults on that debt to the BoE?

We have met the enemy, and he is us — Pogo

by Migeru (migeru at eurotrib dot com) on Wed Dec 12th, 2007 at 05:02:12 PM EST
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