Quantitative easing, otherwise referred to as QE or simply asset purchases, is monetary policy aimed at injecting money directly in the economy. This injection would be aimed at encouraging lending and liquidity in response to a significant drop in demand and consequently a situation of insufficient money in the economy. With QE the central bank wants to influence the quantity of money in the economy by injecting additional reserves in order to revive spending; it does so by purchasing financial assets from the private sector from firms like insurance companies, pension firms and commercial banks.