Central banks wield three main tools. Open market operations mean buying and selling government bonds to expand or shrink the money supply. Buying bonds injects cash into the system.

Reserve requirements set the minimum cash banks must hold against deposits. Lower requirements free banks to lend more. The discount rate is what central banks charge commercial banks for emergency loans.

After 2008, they added quantitative easing — massive bond-buying programs that pumped trillions into economies when traditional methods hit their limits.