<P> Quantitative easing can help ensure that inflation does not fall below a target . Risks include the policy being more effective than intended in acting against deflation (leading to higher inflation in the longer term, due to increased money supply), or not being effective enough if banks remain reluctant to lend and potential borrowers are unwilling to borrow . According to the International Monetary Fund, the U.S. Federal Reserve System, and various economists, quantitative easing undertaken since the global financial crisis of 2007--08 has mitigated some of the economic problems since the crisis . </P> <P> Standard central bank monetary policies are usually enacted by buying or selling government bonds on the open market to reach a desired target for the interbank interest rate . However, if a recession or depression continues even when a central bank has lowered interest rates to nearly zero, the central bank can no longer lower interest rates, a situation known as the liquidity trap . The central bank may then implement quantitative easing by buying financial assets without reference to interest rates . This policy is sometimes described as a last resort to stimulate the economy . </P> <P> A central bank enacts quantitative easing by purchasing--regardless of interest rates--a predetermined quantity of bonds or other financial assets on financial markets from private financial institutions . This action increases the excess reserves that banks hold . The goal of this policy is to facilitate an expansion of private bank lending; if private banks increase lending, it would increase the money supply, though QE does directly increase the broad money supply even without further bank lending . Additionally, if the central bank also purchases financial instruments that are riskier than government bonds, it can also lower the interest yield of those assets (as those assets are more scarce in the market, and thus their prices go up correspondingly). </P> <P> Quantitative easing, and monetary policy in general, can only be carried out if the central bank controls the currency used in the country . The central banks of countries in the Eurozone, for example, cannot unilaterally decide to employ quantitative easing . They must instead rely on the European Central Bank's governing council (composed of all national central banks governors) to agree on a common monetary policy, which they (national central banks) implement . </P>

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