Unconventional Choices for Unconventional Times Credit and Quantitative Easing in Advanced Economies

IMF Staff Position Notes, November 4, 2009

Source details

Canonical URL: Unconventional Choices for Unconventional Times Credit and Quantitative Easing in Advanced Economies

Examines the unconventional monetary policy actions undertaken by G-7 central banks and assesses their effectiveness in alleviating financial market pressures and facilitating credit flows to the real economy.
Reviews a range of unconventional policies—some previously tried, others new—used in response to the deepening of the crisis.
Emphasizes differences in the scale and scope of measures across major central banks.

Central banks acted "nimbly, decisively, and creatively" in their response to the deepening of the crisis.
The scale and scope of unconventional measures have differed substantially across major central banks.
Massive asset purchases have boosted the size of the central bank balance sheets the most in the United States and the United Kingdom.
The Bank of England has relied primarily on the purchases of government bonds.
The Fed has acquired a variety of assets, including commercial paper and mortgage-backed securities and providing financing for acquisition of other asset-backed securities.
Central bank interventions, along with government actions, have been broadly successful in stabilizing financial conditions over time.

Subject: Asset and liability management, Banking, Central bank policy rate, Credit, Financial institutions, Financial services, Liquidity, Money, Securities, Sovereign bonds
Keywords: bank reserves, central bank currency swaps, Central bank policy rate, Credit, Europe, excess reserves, Fed liquidity, financial market, Global, government bond, issue central bank bank bill, Liquidity, liquidity facilities, liquidity operations, monetary policy, money market, overnight rate, preferred shares, quantitative easing, Securities, Sovereign bonds, SPN