When the next recession strikes, advanced economies will have no choice but to resort to unconventional monetary policies again

Financial markets are starting to get rattled by the winding-down of unconventional monetary policies in many advanced economies. Soon enough, the Bank of Japan (BOJ) and the Swiss National Bank (SNB) will be the only central banks still maintaining unconventional monetary policies for the long term.

The US Federal Reserve started phasing out its asset-purchase programme (quantitative easing, or QE) in 2014, and began normalising interest rates in late 2015. The European Central Bank is now pondering just how fast to taper its own QE policy in 2018, and when to start phasing out negative interest rates.

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