From the Wikipedia page on QE:

Quantitative easing (QE) is a monetary policy whereby a central bank purchases predetermined amounts of government bonds or other financial assets (e.g., municipal bonds, corporate bonds, stocks, etc.)

How do central banks get the money to purchase these financial assets?


1 Answer 1


They just create them ex nihilo.

People sometimes say central banks print money, that is not literally true for every central bank (not for Fed since in US money is printed by the Bureau of Engraving and Printing, nominally under the Department of the Treasury. However, most of it is on orders from Fed so they can supply banks with it – see Fed explainer here) but they can always create more money at a keystroke of a keyboard.

When central banks want to buy an asset they typically just electronically create sufficient money on their account to buy the asset.

  • $\begingroup$ Could you provide a source for your last sentence? $\endgroup$
    – Riemann
    Jan 5, 2022 at 12:11
  • $\begingroup$ @Riemann its pretty much common knowledge but sure, here is one source from investopedia I can also add source to textbook later when I am at home $\endgroup$
    – 1muflon1
    Jan 5, 2022 at 12:27

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