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ed States, Federal Fund Rate dropped 50 basis points to 4.75 percent on September 18th 2007 and low its target for 50 basis points to 1 percent on October 29, 2008(FOMC). Bank of England has reduced the official bank to 0.5 percent and it could not practically be reduced below that level which is reached zero-lower bound of interest rate (MPC). Bank of Japan cut the target for the uncollateralized overnight call rate by 20 basis points and reached around 0.3 percent (Bank of Japan).

Open market operations have been utilized as another traditional tool to stimulate the economy. Positive monetary policies are implemented for the purpose of relieve in the phenomenon of tightening credit standards. The Bank of England (BoE), the European Central Bank (ECB), the Federal Reserve, the Bank of Japan and the Swiss National Bank (SNB) are jointly announcing to inject money in the market in order to improve liquidity in the short-term U.S. dollar funding markets on October 13, 2008 and capital injections continues when on November 30 2011, those banks who have agreed to cut temporary liquidity interest rate swap by 50 basis points. (FOMC)

The others traditional instruments such as reduce the rediscount rate and deposit-reserve ratio are included in order to alleviate the phenomenon of credit crunch. Federal Reserves announced to decrease the discount rate from 6-1/4 percent to 0.5 percent from August 20 of the year 2007 to the end of 2008(FOMC).

The impact of the conventional central bank tools in responses to financial crisis does not significant in practise. Additional monetary instruments are needed which are referred to as the untraditional tools. It is defined under the situation that there is no space to cut interest rates or suffocate in the interest rate market transmission mechanism. Through adjustment of the structure of the balance sheet, expand the size of the balance sheet or directly inject liquidity to the market, central banks maintain the market liquidity at a very lower interest situation. Four types of policies are introduced-quantitative easing, special loan, credit easing and commitment effect. 

Quantitative easing is the one that has been utilized as a nonstandard policy in main economics. The purpose of the measure is to raise total money supply by increasing the size of balance sheet through managing in lending and borrowing and central bank responses by purchasing large amounts of long-term securities. 

Many countries followed the quantitative easing such as the United States and the UK. On 18th March 2009, Federal Open Market Committee announced to purchase $300 billion in longer-term Treasury securities in order to ameliorate the private lending markets conditions (FOMC). Quantitative easing policy have been explained by Monetary Policy Committee of Bank of England that stated to purchase of ￡200 billion of UK long gilts from march 2009 and the purchase increased to ￡325 billion on February 2012(MPC).

The second type of the nonstandard policies is called Special Loan. Central banks provide loans to a specific financial institutions or enterprises in direct or indirect way. Term Auction Facility (TAF) and the Primary Dealer Credit Facility (PDCF) and Term Securities Lending Facility (TSLF) are introduced by the Federal Reserves. Through compete between commercial banks in the auction, the Fed can provide reserves to commerc本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。