Portfolio balance: Share prices have increased, recently increase in volatility] The portfolio balance channel broadens the effects of asset purchases to the whole financial system. If a central bank purchases long-term debt securities, the average duration of debt securities on the market decreases. Narrowing of the yield spread encourages investors to purchase bonds with even longer maturities, and long-term bond yields decline further.
–  In my view, the risk of an excessive creation of liquidity feeding bubbles in financial and real asset prices is significantly greater in emerging economies, many of which have been receiving large capital inflows.