Asset purchases – quantitative easing The third policy tool discussed in the report is the outright purchase of assets from the private sector, paying for those assets by creating central bank reserves – also known as quantitative easing or QE. These asset purchases were on an unprecedented scale and led to very large expansions of central bank balance sheets (Graph 3).
Before the financial crisis, the major central banks owned securities equivalent to around 5 per cent of GDP. In recent years, this has risen to nearly 30 per cent. This is a very large change.