Non-standard Monetary Policy

DEFINITION of 'Non-standard Monetary Policy'

Non-standard monetary policy, or unconventional monetary policy, are tools employed by a central bank or other monetary authority that fall out of the scope of traditional measures.

BREAKING DOWN 'Non-standard Monetary Policy'

Non-standard measures include quantitative easing (QE), credit easing, direct asset stabilization of non-governmental securities, and negative interest rates. Many of these policy tools had not been tested in practice until the 2008 financial crisis and the resulting Great Recession.

In contrast, traditional, or standard, monetary policy tools used by central banks include open market operations to buy and sell government securities, setting the overnight target interest rate, setting bank reserve requirements, and signaling intentions to the public.