Quantitative easing

By | 2017-09-13T15:25:44+00:00 13th September 2017|

Quantitative easing is in almost continuous use over the past half decade in major global economies such as the US, the UK, the Eurozone and Japan. It is an unconventional monetary policy in which a central bank purchases government securities or other securities from the market in order to lower interest rates and increase the money supply. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity. Quantitative easing is considered when short-term interest rates are at or approaching zero, and does not involve the printing of new banknotes.