Publication

This paper provides an overview of the reasons why the European Central Bank (ECB) adopted a policy of quantitative easing (QE) in March 2015, the challenges of using QE, and preliminary evidence of the effect of the ECB's policy on markets. The authors argue that the main impact of the QE policy - which involves a central bank creating money to purchase assets from financial institutions in order to boost economic growth - so far has been to affect long-term nominal interest rates that are supplied through signals given to the market by central banks about policy interventions and the announcements of such policies.