In response to economic downturns, central banks have deployed large-scale asset purchases—known as quantitative easing (QE)—to stabilize...

Leverage tools are more targeted, allow sustainable exit strategies, and minimize public risk exposure. Central banks turned to...

Central banks miss the old days when money supply used to be managed via the funding rate. As financial crises become a routine of...

The way to calculate profit determines the risk taking behavior of financial agencies. As long as loan installments are served, banks...

QE now functions like a “narcotic,” requiring ever-larger and riskier interventions, with diminishing benefits for the real economy....

A macroprudential approach that enforces collective bank credit expansion can break the cycle of credit contraction, falling incomes, and...

Banks could exploit the QE driven deposit surplus by charging interest from depositors if the IOER rate does not rise soon.

A higher default risk concentrated in financial markets catalyzes runs in a financial distress.

What bulls stock prices also amplifies fragilities in the financial markets.

Central banks permanently create new money to prevent defaults when they bear the credit risk of commercial securities.