Lehmans 10th anniversary: How important has quantitative easing been to asset prices and what happens next?

The massive economic fallout of this financial disaster still haunts us, as do the effects on our political landscape. But investors have enjoyed strong returns since the episode, in no small part due to the interventions of central banks. They responded to market disarray by slashing interest rates to levels never seen and buying vast quantities of financial market assets - a process we have come to know as quantitative easing (see figure 1, below). Since these extraordinary market interventions began, returns for almost all asset classes have been strong. The investors set for a ...