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This paper based on the financialisation literature discusses how central banks in key middle income countries (Brazil and Korea) through their liquidity and public debt management have spread the process of financialisation in both countries in the last decade. Financialisation can be understood as the rising influence of financial sphere on the path of capital accumulation. It is argued that central bank management of the process of reserve accumulation is the catalyst of financialisation in these countries. Moreover, this process has conditioned and shaped banks’ portfolio decisions during the 2000s in the Brazilian and Korean financial systems. It is shown that the central bank actions have fuelled domestic financialisation by facilitating the expansion of banks balance sheet through the issuance of their own liabilities. The main point put forward by this paper is how the development and deepening of government bonds markets, focusing on central bank interventions, has supported banks in stretching their balance sheets and further affecting the credit supply. This has mainly happened through monetary sterilisation operations which are carried out with public debt securities.

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