In particular, venture capital markets here are both more developed and more geared to financing higher-risk projects, mainly in technology-based sectors by start-ups with prospects of rapid growth. Furthermore, the range of investors is wide and includes pension funds, insurance companies and even private individuals. In contrast, in Europe, venture capital is geared towards more mainstream projects and banks dominate lending.
The new guidance also serves to underscore the Committee’s intention to maintain accommodation as long as needed to promote a stronger economic recovery with stable prices.3 The second type of nontraditional policy tool employed by the FOMC is large-scale purchases of longer-term securities, which, like our forward guidance, are intended to support economic growth by putting downward pressure on longer-term interest rates.