The bursting of the US housing “bubble” unleashed a chain of events, each as complex and dangerous as the last. Underlying all of these, however, has been the urgent need to reduce leverage (debt) in the household sector, the banks and in governments. To offset the impact of this huge adjustment, policymakers around the world, in particular central banks, have found it necessary to resort to “unconventional measures” – ways of trying to stimulate growth at a time when interest rates are already at historic lows. These have included policies such as the Quantitative Easing adopted in the UK and the US, and the more ... (full story)