What is QE ?

I learned from cfa-economics chapters the following

Before reading below , watch this Quantitative Easing in Cartoon

Credit bubble is a time when banks around the world lost equity capital. For this reason, they decreased lending even though the government increase money supply and interest rates fell. Short term rates fell to a point near zero, economic growth is still poor and a real threat of deflation, central banks began a policy termed Quantitative Easing.

In the United Kingdom, quantitative easing entailed large purchases of British government bonds in the maturity range of three to five years. The intent was to reduce interest rates to encourage borrowing and generate excess reserves in the banking system to encourage lending. Uncertainty about the economy's future caused banks to behave quite conservatively and willingly hold more excess reserves, rather than make loans.

In the United States, In the United States, Central Bank buy Large amounts mortgage securities from banks to encourage bank lending and to reduce mortgage rates in an attempt to revive the housing market, which had collapsed.

When this program did not have the desired effect, a second round of QE2 was initiated. The Fed purchased long term treasury bonds in large quantities (hundreds billions of dollars) with the goal of bringing down longer term interest rates and generating excess reserves to increase lending and economic growth.

Developing economies often face additional challenges when implementing monetary policy:
-Absence of liquid bond markets through which to conduct open market operations
-Lack of credibility resulting from prior poor track record in controlling inflation
-Rapid changes in the economy, making it difficult to ascertain the trend rate
-Rapid financial innovation resulting in changes in money supply definition
-Political interference resulting in a lack of central bank independence