CoachQuantitative easing is the purchase of large amounts of longer-term securities, government bonds and sometimes mortgage or corporate bonds, to lower longer-term yields once the policy rate can go no lower or no lower usefully. Its reversal, letting the securities mature without replacing them or selling them, is quantitative tightening.
Exemplos
Example 1.11 (One purchase, three balance sheets)
The central bank buys USD 10 billion of bonds from a pension fund. The central bank: securities , reserves (of the fund’s bank) . The fund’s bank: reserves , the fund’s deposit . The fund: bonds , deposit . The purchase created reserves and a bank deposit of the same size; it did not create a loan, and the bank cannot “lend out” the reserves to anyone but another bank, where they remain reserves (Proposition 1.2).