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Quantitative Easing

Quantitative Easing
Quantitative easing (QE) refers to large-scale asset purchases by the US Federal Reserve to inject liquidity in the world’s biggest economy after the onset of the global financial crisis in late 2008. In September 2012, stubbornly high US unemployment and faltering economic growth prompted it to launch QE3, under which it planned to buy US$40 billion worth of bonds per month, with no set end date. As of late 2012, it had bought some US$2.3 trillion in long-term securities. In December 2012 it announced it was increasing its purchases to US$85 billion a month.
Illustration: Henry Wong
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IMF urges China to focus on consumption-led rebalancing, curb industrial policy

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As China’s central bank projects confidence, are rate cuts on the back burner?

The People’s Bank of China said the economy was on track to hit its annual growth target despite facing a challenging environment.

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Explainer | China’s 100-billion-yuan question: does government bond purchase shift policy?

Speculation is rife on what a US$14 billion treasury bond buy means for China’s money-supply mechanism, and whether the rare move equates to quantitative easing.

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China's economic recovery

China must act to avoid crisis, former Japanese central banker warns

Former central bank governors have raised the alarm over deflation and slowdown, both of which were symptoms in Japan’s ‘lost decades’.

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Haruhiko Kuroda, former governor of the Bank of Japan, is among the voices cautioning China over its deflation and low consumer confidence. Photo: Bloomberg
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Explainer | What 3 changes has China’s central bank made amid monetary policy reshuffle?

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Opinion | A US$1 trillion property bailout is the last thing China’s economy needs

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Japan

The View | Japan stock rally peters out as investors wake up to another lost decade

Japan has squandered its chances to properly raise interest rates, abandon the weak yen policy and put strong reforms in place.

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A woman walks past a currency exchange shop in central Tokyo on June 30, after the yen slid to its weakest value against the US dollar since 1986. It’s time to end the weak-yen policy, which has over the years deadened the urgency for Tokyo to raise its economic game and increase competitiveness. Photo: AFP
China economy

The View | How China’s slowdown is shaking up Asia’s economic calculus

China’s struggles are injecting uncertainty into its neighbours and forcing reassessments when the geopolitical scene is already strained.

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An employee works on a production line at a factory that produces polyethylene flexible pipes for export in Lianyungang, Jiangsu province, on June 20. China’s exports continue to look strong, but concerns persist about the property sector and other parts of the economy. Photo: AFP
China's economic recovery

PBOC says treasury bond purchases coming, but don’t call it quantitative easing

Amid calls for greater economic support, China’s central bank governor says at Lujiazui Forum that the policy toolbox will not include any drastic moves.

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China must ‘liberate’ mind with primary market bond purchases by central bank

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China’s central bank treasury-bond trade restart is ‘now certain’ amid talks

State media article on Wednesday says it is ‘certain’ that China’s central bank will participate in treasury bond trading amid better coordination with the finance ministry.

An instruction by President Xi Jinping that was only made public in March had fuelled speculation over an aggressive easing of monetary policy. Photo: EPA-EFE
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The People’s Bank of China has indicated a willingness to make direct trades in secondary bond markets, a more aggressive policy stance than the bank has previously taken. Photo: Bloomberg
China economy

China’s central bank ‘cautious’ in bond trade, even with mandate from Xi

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Japan

The View | Japan’s split-screen economy: roaring stocks and shrinking GDP

The Japanese economy is a study in contrasts, with a roaring stock market and record corporate profits set against stagnant wages and shrinking GDP. Decades of prioritising a weak yen over structural reform have deadened Japan’s animal spirits and hurt its attractiveness as an investment destination.

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Store owner Hiromichi Akiba works at his supermarket in Tokyo on February 16. While swelling corporate coffers are enriching global investors. Japanese workers face stagnant wages. Photo: Reuters
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The View | Why Japan letting yen weaken risks stirring up global hornet’s best

Stand-offs between Japan and currency traders over a weak yen are nothing new, but the stakes now are higher than ever and have global implications. If Tokyo policymakers aren’t careful, their dithering could spark devaluations across Asia and a backlash from US politicians struck with election fever.

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Opinion | The dollar super bubble may finally be popped – by the Israel-Gaza war

The effects of war and inflation could send US financial markets into a tailspin, forcing China to completely ‘unpeg’ from the dollar – which could then collapse.

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Japan

The View | What if it’s Tokyo, not Beijing, that has most to learn from ‘Japanification’?

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Drivers fuel their cars at a petrol station in Tokyo on September 22. Japan has, for decades, suffered timid investment trends, sluggish income growth and a dearth of risk-taking. Photo: EPA-EFE
China's economic recovery

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Chinese leadership has stopped saying that “houses are for living in, not for speculation”. Photo: Reuters
China economy

The View | Will Beijing bring out the ‘big bazooka’? I would bet on it

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China's economic recovery

As China’s household debt creeps upward, IMF’s warning line looms

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China economy

Editorial | Confidence central to lifting China economy out of the doldrums

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An engineer checks a laser cutting machine, used to make new energy vehicles, in Wuhan, in China’s central Hubei province. Beijing must get in front of sagging confidence to pull the nation’s economy out of its slump. Photo: AFP
Banking & finance

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US dollar notes being counted out at a money changer booth at the Raffles Place financial business district in Singapore. The outsize role of the US dollar in global finance makes it a potent, yet possibly destructive, force. Photo: AFP
Banking & finance

Macroscope | No repeat of the 2008 global financial crisis but other dangers lurk

In the US, large banks remain safe but there is little political appetite to throw fiscal support at the smaller, failing banks. In Europe, the shock that Credit Suisse’s AT1 bondholders were made to absorb losses first, continues to reverberate.

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Banking & finance

Macroscope | We need a better financial system so bankers can’t go on crashing it

Outside China, banking and finance often seem more of a black box than is healthy for the system. We need a better design for the benefit of many, not bonuses for the few.

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