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The new money swells the size of bank reserves in the economy by the quantity of assets purchased hence "quantitative" easing.
The centerpiece of this is the so-called liquidity coverage ratio, which tests the quantity of assets a lender holds to withstand 30 days of investors pulling money in a stress situation partly modeled on the financial crisis.
Mr Irwin suggests that Fed officials may like the policy because the announcement of a specific interest rate target may lead market to quickly converge on that rate, reducing the quantity of assets the Fed needs to buy.
In such an environment, the quantity of assets in the hands of the private sector affects the return (typically by lowering the term premium) and some forms of market segmentation induce changes in consumption and investment behaviour.The direct evidence in support of QE is mixed, and the estimated magnitudes of its effects rather uncertain.
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Now, at the same time as doubling its loss-covering commitment to each company to $200 billion, the Treasury has increased the quantities of assets and debt each may hold.
"Given the limited size of this market," she wrote, the ECB "has not yet given itself scope to buy anywhere near the quantities of assets bought by other major central banks".
Potentially, this class of assets offers huge scope for Fed operations, as the quantity of foreign assets eligible for purchase by the Fed is several times the stock of U.S. government debt.
But one member of the panel took an opposite view, saying that the "quantity of planned asset purchases could be scaled back" because of continuing improvements in the economy.
Gold price appreciation in the long term has led to an upsurge in the quantity of this asset demanded by investors, ceteris paribus.
The quantity of each asset.
But differences between national jurisdictions between pious Saudi Arabia and more liberal Malaysia, say, are likely to remain.Both of these countries feature in the top three markets for Islamic finance, measured by the quantity of sharia-compliant assets (see table).
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