Download History of Quantitave Easing

Monetary Policy in the Crisis
1.
Recent History of Policy and Theory
– Policy
– Theory
2. Policy Response to the Crisis
– Conventional Policy
– Conventional Unconventional Policy
– Unconventional unconventional Policy
3. The Future of Monetary Policy
– Exit
– Will IT Survive?
– The International Dimension
Important abbreviations
ABCP Asset-Backed Commercial Paper
APF Asset Purchase Facility
APP Asset Purchase Program
BOE Bank of England
BOJ Bank of Japan
CBPP covered bond purchase program
CFI corporate finance instruments
CPFF Commercial Paper Funding Facility
ECB European Central Bank
ETFs exchange-traded funds
FOMC Federal Open Market Committee
FRFA fixed-rate, full-allotment
FROs fixed-rate operations
GDP gross domestic product
GSE government-sponsored enterprise
GSFF Growth-Supporting Funding Facility
JGBs Japanese government bonds
J-REITs Jap. real estate investment trusts
LSAP large-scale asset purchase
LTROs longer-term refinancing operations
MBS mortgage-backed securities
MMMF money market mutual fund
MROs main refinancing operations
OIS overnight indexed swap
OMTs outright monetary transactions
QE quantitative easing
SBLF Stimulating Bank Lending Facility
SFSOs special-funds-supplying operations
SMP Securities Markets Programme
ZIRP zero interest rate policy
Source: Fawley & Neely, Four Stories of Quantitative Easing, Federal Reserve Bank of
St. Louis Review, January/February 2013, 95(1), pp. 51-88.
Policy interest rates
6
United States
5
Euro area
6
5
Japan
4
4
3
3
2
2
1
1
0
2004 2004 2005 2006 2006 2007 2008 2008 2009 2010 2010 2011 2012 2012
0
Source : OECD Economic Outlook Database.
Nominal lending rates
8
8
United States
7
7
Euro area
Japan
6
6
5
5
4
4
3
3
2
2
1
1
0
0
Q103
Q104
Q105
Q106
Q107
Q108
Q109
Q110
Q111
Q112
Source : ECB datawarehouse; U.S Federal Reserve and Datastream.
Real lending rates
5
5
United States
Euro area
4
4
Japan
3
3
2
2
1
1
0
0
-1
-1
-2
-2
Q103
Q104
Q105
Q106
Q107
Q108
Q109
Q110
Q111
Q112
Source : ECB datawarehouse; U.S Federal Reserve and Datastream; OECD
Economic Outlook and OECD calculations.
History of Quantitave Easing (Fawley and Neely, 2013)
http://research.stlouisfed.org/publications/review/13/01/Fawley.pdf
2008
Oct 7
Oct 15
Nov 25
Dec 2
FED creates Commercial Paper Lending Facility
ECB offers Fixed-Rate Full Allocation repos
FED buys $ 600 billion in MBS and GSE (100)
BOJ announces unlimited lending to banks
2009
Jan 22
March 18
May 7
Dec 1
BOJ buys ¥ 3 trillion commercial paper
FED buys $ 1.1 billion in various assets
ECB buys € 60 billion covered bonds
BOJ offers ¥ 10 trillion 3-month loans
2010
March 17
May 10
BOJ offers another ¥ 10 trillion 3-month loans
ECB buys government debt an secondary market (SMP)
Composition of Quantitave Easing (Fawley and Neely, 2013)
end-2012
FED
$ 1.5 trillion long-term government bonds
$ 1.4 trillion mortgage-backed securities
$ 0.2 trilion GSE debt
ECB
€ 100 billion covered bonds
€ 220 billion government debt (SMP)
BoJ
¥ 150 trillion Japan Government Bonds
¥ 3.2 trillion commercial paper
¥ 4.2 trillion corporate debt
¥ 2.1 trillion other
Central bank assets (% of GDP)
90
90
United Sates
Japan
Euro area
Switzerland
80
80
70
70
60
60
50
50
40
40
30
30
20
20
10
10
0
0
Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source : ECB datawarehouse; U.S Federal Reserve and Datastream; OECD
Economic Outlook and OECD calculations.