Snapshot of QE in Europe?

  • In very crude terms, when an economy slows, a central bank can try boost growth by lowering interest rates or by Quantitative Easing (QE), injecting cash (liquidity) into the economy (by buying bonds from the marketplace).
  • With interest rates super-low (and some even -ve), the ECB launched a massive QE programme in Jan '15, which involved buying EUR1.1tn of bonds from the marketplace, which is the same as a EUR1.1tn cash injection into the economy.
  • But China slowdown and uncertainty in emerging markets have created new growth concerns, so ECB considering expanding the QE program (next meeting in early December).

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