As they lent cash or cash equivalents against collateral—good and bad—the balance sheets of all the major central banks began to expand. Potentially, at least, this could be done without limit within a closed national economy, or a large currency zone like that of the euro or the dollar. But what such operations could not conjure up was liquidity in foreign currencies. The Bank of England supplied sterling, the ECB euros. This domestic currency constraint was a crucial limit on the power of central bank operations and particularly so in 2008, because what the European banks desperately needed
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