Confused. The ECB began its own (quite a bit smaller) QE a few months after we did, as did the UK. I want to say the ECB continued that in some of the intervening years, and they definitely began a comprehensive program in January. Euro exchange rate collapse didn't spring from nothing. My guess is, in a better format she'd clarify that the type of QE we did and they did were different in practice in some way.The reason the US response was less bad than Europe’s is that we combined it with some fiscal stimulus, albeit not that much. By contrast, Europe has gone for austerity all the way.
I was trying to figure that part out too. This article begins to go through what's different.
So in other words, it's not really a stimulus. If you say you're going to give $1b to the Greeks but if they don't pay you back they're on the hook for $800m, you've actually only given them $200m.Unlike the U.S. version of QE, the European plan involves keeping most of the losses contained in the country where they’re incurred. (This is analogous to allowing the states encompassed by the Chicago Federal Reserve bank district to largely fend for themselves.)
When the ECB in March begins buying 60 billion euros' worth of securities from European institutions every month through September 2016, any financial losses that occur will be largely contained inside the countries where they happen. When ECB President Mario Draghi announced Europe’s QE on Thursday, he said the eurozone as a whole will absorb 20 percent of “risk sharing” while the rest will “not be subject to risk sharing.”
This means that if a bank investment goes bad in, say, Italy, 80 percent of the loss will stay in Italy. “There’s a serious issue about how this is going to work,” said Cecchetti. “I’m concerned that this will dilute the effect of QE.”