Shigenori Shiratsuka

Evolution of Quantitative Easing

This chapter attempts to shed some light on the evolving nature of quantitative easing, or unconventional monetary policy in general. Confronted with the recent financial crisis, central banks in major economies moved swiftly and aggressively to counter the adverse effects of the malfunctioning financial system. In that process, central banks introduced various unconventional policy measures regarding the range of financial assets being purchased and in the scale of such purchases. As a result, central banks significantly expanded their balance sheets, especially so after the collapse of Lehman Brothers in September 2008. Thereafter, central banks continued to maintain expanded balance sheets by constantly reorganizing their policy strategy in accordance with changes in economic and financial conditions.