Quantitative Easing Did Affect Risk-Taking, Lending Standards

Posted To: MND NewsWire

In response to the 2007-2008 financial crisis and the ensuing Great Recession, some central banks, including the U.S. Federal Reserve, put some unconventional monetary policies in place. Among these policies were large-scale asset purchase programs (LSAPs) which are more commonly referred to in the U.S. as quantitative easing (QE) measures. The Fed put three waves of QE in place. Use of these measures has led to debates about their effects on economic outcomes in general and especially financial stability, with proponents emphasizing that they increased confidence and risk taking and therefore stimulated overall economic activity and sped up the recovery. Critics argue these policies were ineffective or inefficient and that they may have set the stage for the next financial crisis by encouraging...(read more)

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