Central Banks and Their Limits in a Pandemic

Abstract

The chapter discusses the reactions of central banks to the current pandemic and contrasts them with their monetary policy operations during normal (noncrisis) times and their reactions to the Global Financial Crisis (GFC) of 2007–2009. It situates the response of central banks in Asia within a global context, examining and comparing the responses of central banks in the United States, the Euro area, the United Kingdom, Japan, Singapore, and Hong Kong. It explains why this crisis is unprecedented, making it dangerous in terms of financial stability and state finances and difficult for central banks to return to normality.