When severe economic crises push short-term nominal policy interest rates down to the Zero Lower Bound (ZLB), traditional conventional monetary tools lose their effectiveness. To continue supporting the real economy, central banks expand their toolkits and deploy Unconventional Monetary Policy Instruments.

Unconventional policies look past short-term interbank interest rates to influence long-term borrowing costs, support asset valuations, and expand credit availability across the financial system through direct balance sheet expansions.