Central banks generally have two types of emergency facilities. One is active – the central bank chooses what type of assets it wants to purchase and how much of each, then goes into the market and buys them. The second type is passive – the central bank offers to lend to banks should they want to borrow. This is harder to forecast as it depends on how much banks want to take up.

The chart below shows how the combined asset purchases of the Federal Reserve, Bank of England, Bank of Japan and European Central Bank will evolve as a result of their recent active policy announcements. Central banks have been vague on the timeframe over which they expect to complete these purchases, but they will probably want to get them done sooner rather than later. The chart assumes announced policies will be completed evenly over the next six months.

Central bank balance sheets will no doubt increase much faster than this as the passive policies – which are now being offered to non-financial companies as well as financial ones – start to kick in. The combined policies of these central banks will add $1.9tn of liquidity at today’s exchange rates and increase their securities held outright by 16%. If completed over the next six months, it will be the most rapid pace of purchases yet undertaken.