Quantitative Easing: Bank Profit Drop Culprit
"Quantitative easing" is a government monetary policy launched to ease off the market in intense situations. It had increasing the money supply as the primary goals. The government buys the securities in order to increase the capital in the market and increase in the buying capacity of people. It increases the money supply by flooding the financial institutions, which in turn leads to easier lending. However, it has a negative factor too. It leads to increase in the prices of the goods, and services, as the supply does not increase though the monetary condition gets better. At certain situations, it can cause inflation like situation. Quantitative easing was nicknamed as "QE" and "QE2" was the term given to it when the process was repeated by the Central Banks in U.S. in the year 2010. Similarly, the third round of the process was termed as "QE3" and the first one preceding "QE2" as "QE1." The QE3 was announced on September 13 2012 and is expected to run until 2015.
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