Developed countries's Central Bank Responses in the Global Financial Crisis

          In last blog, I mentioned in Larry Elliott's article, the global financial crisis been divided into five key stages. Different from the others financial crisis in the past. The government and central bank all over the world react quickly. 

        In the U.S., the Emergency Economic Stabilization Act of 2008 published in the 3.10.2008 after Lehman Brothers filed for bankrupt.Including the Government has allocated seven hundred billion U.S. dollars to buy illiquid securities secured by real estate, the purpose is to increase the liquidity of the secondary mortgage market and reduce losses of financial institutions have these securities may be facing. After that Federal reserve through Quantitative easing policy to increase amount of money supply. In Obama government, they made a number of new solutions and continued the QE policy. In 31.12.2012, Federal reserve system released the QE4 said that Monthly purchasing $ 45 billion debt to replace operation twist, QE3 per month plus $ 40 billion of the amount of easing, the Federal asset purchases to reach $ 85 billion per month. In addition to quantitative easing drastic than the Federal to maintain a zero interest rate policy to keep interest rates at 0 to 0.25 percent of the very low levels.

                                                      Graph 1: Money supply of Unite State from 1998 to 2012

            Similar to the policy of U.S central bank, the central bank in most developed countries also choose to inject money supply. In Europe, the European Central bank also issue a series methods to meet the financial crisis. The key point is also to print money into the market. France, Belgium and Luxembourg, the three governments to provide 9 billion euros in Dexia Group. After the Irish banks are affected, the Irish government announced six Irish banks including Allied Irish Bank, Bank of Ireland, British Irish Bank, Irish Life Permanent, Irish Nationwide and EBS Building Society to guarantee all deposits, including bonds, senior debt and dated subordinated debt, involving a debt of about 400 billion U.S. dollars.

              This blog I talk about the methods central bank take to meet the global financial crisis in developed countries. Next blog I will focus on the developing countries behavior.
                 Data:
                 The graph collected from http://www.quandl.com/

                 The video collected from http://www.youtube.com
               
                 Conference:
                 Quantitative easing, Bank of England.