What is quantitative easing?
It is also called “printing money”. But rather than dishing out sacks of newly minted coins and notes, central banks use a more complicated process to inject cash into their economies – by buying assets, typically government bonds, from banks or other financial institutions such as pension funds. The hope is that banks will use the extra funds to increase lending to households and businesses. QE is used when central banks run out of other (more conventional) options, such as reducing borrowing costs. At the moment, interest rates are so low globally that further cuts would do little to revive ailing economies.