Assignment Details:

Please comment on the following statement:

According to some analysts, the expansionary monetary policy of quantitative easing has threatened the international financial system. They warned that the “near unlimited availability of central bank liquidity to the banking sector and the shadow banking sector” had the possible effect of misallocating capital and encouraging investors to take on a high level of risk.

Such excess liquidity threatened to create credit bubbles, and subsequent busts, in emerging markets.

1. Please justify your answers fully and critically evaluate ideas, arguments, and points of view.
2. When quoting from documents, please give a precise reference to the source material