For example, the Bank of England and the Bank of Japan have employed detailed forward guidance and conducted large-scale asset purchases, while the European Central Bank has moved to reduce the perceived risk of sovereign debt, provided banks with substantial liquidity, and offered qualitative guidance regarding the future path of interest rates.
With short-term rates near zero, expanded guidance about intentions for future policy has helped to shape market expectations, which in turn has eased financial conditions by putting downward pressure on longer-term interest rates and helped support economic activity.