These policy measures were unconventional in terms of instruments and operational targets.1 Undoubtedly, the quantitative easing adopted by central banks was one of the boldest policy experiments in the modern history of central banking. Another unconventional measure was the use of negative policy interest rates, though for achieving different objectives.
The impact of these unconventional monetary policies is well known by now as large amount of liquidity created in the international financial system was channelled to EMEs in search of yield, creating boom and bust cycles in those economies. Regulatory Response to the Crisis 9. From a supervisory and regulatory perspective, the crisis revealed some significant fragilities in the system.