Quantitative easing has long been considered an effective strategy by many central banks that had hit the zero lower bound for nominal interest rates. However, the decision to buy ‘safe’ government bonds was questionable. Rather, central banks should have bought risky assets, such as equity, as the Hong Kong Monetary Authority did over the 1997 Asia crisis. Not only would that have been cheaper – since the central bank would have needed to buy fewer assets – exit would have also been easier since these equities could have been sold at a substantial profit. […]