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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.
last updated:
9 September, 2024
The People’s Bank of China has made clear that Beijing’s treasury bond trade does not equate to quantitative easing. Photo: Reuters
China's economic recovery

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

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Banking & finance

Explainer | What 3 changes has China’s central bank made amid monetary policy reshuffle?

China economy

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

Stimulus right after a deflated bubble risks a debt mire. Better to invest in China’s green tech and harness global talent to ensure prosperity.

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Air conditioning units on a building in Beijing on August 1. There is a natural bottom to the economic slowdown from the property downturn but investing in the state grid to prioritise renewable energy will secure a green and prosperous future. Photo: Bloomberg
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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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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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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Pan Gongsheng, governor of the People’s Bank of China, speaks during the Lujiazui Forum in Shanghai on Wednesday. Photo: Bloomberg
Banking & finance

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

China’s central bank is set to participate in treasury-bond trading in the secondary market, and a prominent researcher affiliated with the Ministry of Finance says purchases in the primary market should also be made.

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Banking & finance

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.

Banking & finance

China’s central bank drops hints at bond trades, raising odds of direct action

The People’s Bank of China has indicated its approval for trading treasury bonds on the secondary market, signalling more robust action to boost liquidity and fuel growth is no longer out of the question.

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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

Even after President Xi Jinping has asked for China’s central bank to trade government bonds, the outcome is likely to remain limited as the bank does not want to trigger negative outcomes for inflation and exchange rates.

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The People’s Bank of China, the country’s central bank, is expected to take a modest approach to trading in the government bond market. Photo: AP
Banking & finance

China’s monetary mix more ‘effective’, economy-focused than West’s easing policy

Senior central bank official says China’s monetary policies are ‘effective and obvious when compared with foreign central banks’.

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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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Banking & finance

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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A pedestrian views a display showing the exchange rate between the Japanese yen and US dollar in Tokyo on October 26. The continued weakness of the yen is raising fears among some observers that, if left unchecked, other Asian economies might respond by weakening their currencies and starting a race to the bottom. Photo: EPA-EFE
Banking & finance

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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China’s unofficial dollar peg is transferring the pressure of dollar collapse fears to US bonds but the growing conflict in the Middle East could tip the balance. Photo: Shutterstock
Japan

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

For all the talk of China’s urgent need to take action to avoid Japan-like lost decades, Japan itself should take heed of lessons from the past 25 years. Both Tokyo and Beijing must boldly undertake reforms, encourage consumption over saving and tackle inefficiencies to weed out ‘zombie’ companies and sectors.

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China's economic recovery

Explainer | What tools did Beijing use to defuse China’s past financial crises?

From intentionally setting up ‘bad banks’ in the ’90s to more recent bank takeovers, Beijing has a history of reaching into its deep bag of policy tools to make economic repairs.

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China economy

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

Chinese leaders are wary of worsening the economy’s structural imbalance, but if light-touch measures continue to fail to lift business and consumer confidence, it could be only a matter of time before they take firmer action.

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A screen displaying the latest stock exchange data is reflected in a traffic light post, in Shanghai, on August 28. Investors must take the probabilities of what they think the mainland economic authorities will do and decide to buy now or hold off. Photo: EPA-EFE
China's economic recovery

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

Excessive levels of indebtedness and slow income growth among Chinese residents are constraining consumption, but for now China’s Politburo is relying more on domestic demand to fuel national growth.

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China economy

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

Mixed signals provide an opportunity for some stimulus when stability is paramount, but concerns of consumers must be allayed.

Banking & finance

Opinion | Weaponising US dollar risks setting global economy on fire

When global finance is used to punish political adversaries and economic competitors rather than promote growth, it undermines a global public good. For the US too, a powerful currency is also a double-edged sword.

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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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The bank that started it all: Silicon Valley Bank. A financial chart of its share price is displayed on the floor of the New York Stock Exchange on March 10, before trading was suspended. Photo: Bloomberg
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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Banking & finance

Macroscope | As US banking stress rises, here’s what investors should be looking at

The Fed’s mopping up of market liquidity has put stress on banks. While the tightening is set to end, market concerns remain. Investors can gauge temperatures by tracking bank deposit shifts and indicators such as the FRA-OIS spread and US Conference Board’s leading credit index

Silicon Valley Bank (SVB)

Opinion | With SVB bailout, US is spending its way out of a bind again

Expect more banking and bond fund blow-ups with the US reluctant to stop the endemic moral hazard in its financial system, preferring to lean on the dollar.

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A security guard looks out as customers line up at Silicon Valley Bank’s headquarters in Santa Clara, California, on March 13. Photo: AFP
US Federal Reserve

Macroscope | Chinese investors are backing off US assets as storm clouds gather

Investors are taking their cue from the US Federal Reserve as it tries to reduce its holdings of US government debt. However, there are no signs investors are rushing to the exits on US assets; they are merely adjusting risk preferences ahead of what is likely to be a difficult few months.

A trader watches US Federal Reserve chairman Jerome Powell on a screen at the New York Stock Exchange. International investors are following the Fed’s lead and selling off US government debt, suggesting ebbing investor confidence as the US Congress is at an impasse over the debt ceiling. Photo: Reuters
China's economic recovery

China’s next economic tsar? He Lifeng raises profile with central bank visit

Beijing again puts He Lifeng alongside senior cadres during a high-profile stop at the People’s Bank of China, leading to increased speculation about major economic policy changes.

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Macroscope

Macroscope | Global recession? Look forward to a good stock market rally instead

Are the gloomy forecasts about the global economy justified? The recovery of the US, Chinese and European economies, inflation easing and the glut of liquidity from previous crises should be enough to buoy investment for years.

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