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Quantitative easing (QE) as a monetary policy tool entered economic parlance not so long ago. It has been applied by central banks for the large purchase of government bonds in the secondary market. In some jurisdictions, as in the case of the US Federal Reserve, it has also included the purchase of private assets containing credit risk.

Today, as during the 2008/2009 crisis, central banks have decisively deployed QE and other unconventional tools. Failure to do so would condemn their economies to slump for many years to come. They are very aware that a cut in interest rates alone in a downturn, let alone in the severe downturn of Covid-19, cannot generate enough private-sector demand for credit when the general outlook for firm profitability and household income is weak...

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