Will higher interest rates bring the next crisis?

IMAGINE a situation where whenever you needed it, you could always dip into the kitty and come up with a fistful of dollars. This is what it was like for the past decade when central banks around the world, including the United States Federal Reserve (Fed) and the European Central Bank (ECB), created money by buying up bonds in the market, what is known as quantitative easing (QE).

Mopping up these bonds had the effect of making long-term interest rates lower, while at the same time, policymakers in these developed economies such as the US, the European Union and Japan also held down short-term rates by keeping key interest rates low.