In a sense, governments use monetary finance every day.

Every dollar or pound spent is a new dollar or pound.

It is just that they no longer withdraw the reserves created by deficit spending in the banking system when they no longer auction bonds to cover the deficit spending

in full.

QE does this indirectly.

1) Net spending creates reserves
2) Bond issuance drains reserves
3) Central bank purchases of bonds on the secondary market puts the reserves back again.

Outright monetary finance a la Bank of England just simplifies this

1) Net spending creates reserves
Not doing 2) has the same final impact as doing 2)+3)

Only difference is the Bank of England now & #39;owns& #39; the government& #39;s overdraft, rather than government bonds.