range of eligible counterparties ; and providing funding to banks at below the cost that was then prevailing in highly stressed markets, sometimes on the condition that the banks provide credit to businesses and households. this graph shows the size of the extended liquidity operations of the major central banks ( graph 2 ). the biggest operations were during the crisis period of 2008 and 2009, with significant liquidity support also being provided in 2011 and 2012 to support bank lending during the european sovereign debt crisis. https : / / www. rba. gov. au / speeches / 2019 / sp - gov - 2019 - 11 - 26. html 3 / 12 26 / 11 / 2019 unconventional monetary policy : some lessons from overseas | speeches | rba graph 2 it is worth recalling that during these periods of stress, banks had become very nervous about their access to liquidity. this, in turn, made them nervous about lending to others, making the possibility of a severe credit crunch very real. by providing financial institutions with greater confidence about their own access to liquidity, central banks were able to support the supply of credit to the economy. the cgfs report recognises that there were some side - effects of doing this, but the strong conclusion of the report is that these measures eased liquidity strains in highly stressed bank funding markets and helped restore monetary transmission channels to the broader economy. asset purchases – quantitative easing the third policy tool discussed in the report is the outright purchase of assets from the private sector, paying for those assets by creating central bank reserves – also known as quantitative easing or qe. these asset purchases were on an unprecedented scale and led to very large expansions of central bank balance sheets ( graph 3 ). before the financial crisis, the major central banks owned securities equivalent to around 5 per cent of gdp. in recent years, this has risen to nearly 30 per cent. this is a very large change. https : / / www. rba. gov. au / speeches / 2019 / sp - gov - 2019 - 11 - 26. html 4 / 12 26 / 11 / 2019 unconventional monetary policy : some lessons from overseas | speeches | rba graph 3 as part of their qe programs, central banks bought a wide range of assets, but the main asset purchased was government securities. central banks now hold nearly 30 per cent of government securities on issue, which is equivalent to around 20 per cent of gdp. the largest purchases have been made by the bank of japan, which holds almost 50 per cent

it possible to distinguish between the decision to save and to invest, so that the investor does not need to save all the necessary money before making the investment. this enables the implementation of many projects that would not otherwise see the light of day. however, the financial sector does not merely make it possible to distinguish between these decisions ; it also makes it possible to solve the conflict of interests that often prevails between the saver and the investor. a saver often wants to be able to get his money back quickly if the need arises. an investor, on the other hand, normally needs to have the money over a longer period of time, as it usually takes a while before an investment pays off. the financial sector offers two possible solutions to this conflict of interests. the investor can either turn to a bank, which can convert savings into long - term lending, or the investor can issue securities directly onto the market. in both cases, the saver can normally regain his money at relatively short notice. in the first case, the money is withdrawn from the bank and this works painlessly, unless all the other savers have the same idea at the same time. in the second case, the securities are sold on a secondary market. without these possibilities to quickly realise savings, there would be much less money channelled into investments, which are of crucial importance for economic development. a properly functioning capital allocation is thus of major importance to a country's long - term growth, which is also confirmed by several empirical studies made in this field. mohsin khan and abdelhak senhadji have made a review of such studies for the imf. i can recommend it for those who are interested. facilitating risk management then we come to the third fundamental task of the financial sector ; facilitating the management of economic risks. as i mentioned earlier, swedish savers have already realised the importance of not investing all their savings in the same place. when one distributes one's savings across a number of funds with different allocation, for instance to various industrial sectors, there is less risk, as one would not suffer such great losses if one fund were to show a poor development. however, the financial markets also offer other opportunities for risk management. it is possible to pay someone else to take over a financial risk. this can be done with the aid of various types of derivative. for example, in export deals it is not unusual for payments to be made some time after the goods have been delivered.