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QE and ZIRP

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A simple visual description of how and why QE and ZIRP is intended to work

Published in: Economy & Finance
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QE and ZIRP

  1. 1. Withdrawals Bank of England Banks UK Treasury Shadow Banking Consumers Business Providers Profit Bonds & Interest Cash & Tax Tax Wages Purchases Loans Interest Investment Loans Interest Loans Interest Deposits Insurance Normal Activity
  2. 2. Withdrawals Bank of England Banks UK Treasury Shadow Banking Consumers Business Providers losses Bonds & Interest Cash & Tax Tax Wages Purchases Loans Interest Investment Loans Interest Loans Interest Deposits Insurance Suffering losses
  3. 3. Withdrawals Bank of England Banks UK Treasury Shadow Banking Consumers Business QE Providers losses Bonds & Interest Cash & Tax Tax Wages Purchases Loans Defaults Loans Defaults Loans Defaults Deposits Insurance X X X Breakdown
  4. 4. Withdrawals Bank of England Banks UK Treasury Shadow Banking Consumers Business QE Providers Toxic Assets Bonds & Interest Cash & Tax Tax Wages Purchases Loans Interest Loans Interest Loans Interest Deposits Insurance QE & ZIRP

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