|Author (Person)||Claeys, Grégory, Darvas, Zsolt|
|Series Title||Bruegel Policy Contributions|
|Series Details||No. 03, March 2015|
|Publication Date||March 2015|
|Content Type||Journal | Series | Blog|
Ultra-loose monetary policies, such as very low or even negative interest rates, large-scale asset purchases, long-maturity lending to banks and forward guidance in central bank communication, aim to increase inflation and output, to the benefit of financial stability. But at the same time, these measures pose various risks and might create challenges for financial institutions. By assessing the theoretical literature and developments in the United States, United Kingdom and Japan, where very expansionary monetary policies were adopted during the past six years, and by examining the euro-area situation, we conclude that the risks to financial stability of ultra-loose monetary policy in the euro area could be low. However, vigilance is needed.
|Subject Categories||Economic and Financial Affairs|
|Countries / Regions||United Kingdom|