IMF Staff Country Reports

Euro Area Policies : Financial Sector Assessment Program-Technical Note-Systemic Liquidity Management

Author/Editor:

International Monetary Fund. Monetary and Capital Markets Department

Publication Date:

July 19, 2018

Electronic Access:

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Summary:

The flexibility shown by the ECB/Eurosystem in adapting its framework, as required by circumstances, has helped improve funding and liquidity conditions. Compared to the situation pre-crisis, the ECB/Eurosystem has provided liquidity against a broader range of collateral and for as long as four years in terms of maturity; extended liquidity in foreign currency; conducted outright purchases of public and private sector assets (now tapering off); and reduced interest rates into negative territory. In these arrangements, policy is directed from the center, but is implemented mostly by the National Central Banks (NCBs); risks are largely shared. Market participants are complimentary about the role the ECB/Eurosystem has played in backstopping the financial system and its forward guidance on monetary policy.

Series:

Country Report No. 18/229

Subject:

Emergency assistance Euro Area Financial Sector Assessment Program Foreign exchange markets Liquidity management Money markets