## Euro Area Monetary Policy in Uncharted Waters

_IMF Working Papers, August 1, 2009_

## Source details

**Canonical URL:** [Euro Area Monetary Policy in Uncharted Waters](https://www.imf.org/en/publications/wp/issues/2016/12/31/euro-area-monetary-policy-in-uncharted-waters-23241)

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## Bibliographic details
- Authors: Emil Stavrev, Thomas Harjes, Martin Cihak
- Published: August 1, 2009
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451873320.001

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### Summary findings
- The paper analyzes the European Central Bank's (ECB's) response to the global financial crisis.
- The core part of the ECB's monetary policy transmission—from policy rates to market rates—continued to operate during the crisis, but with decreased efficiency.
- There is evidence that the ECB's non-standard measures reduced money market term spreads, facilitating pass-through from policy to market rates.
- Results imply that the substantial increase in the ECB's balance sheet may have contributed to a reduction in government bond term spreads.

### Non-standard measures and effects
- Identified non-standard measures:
  - Lengthening of the maturity of monetary policy operations.
  - Provision of funds at the fixed rate.
- Observed effects:
  - Reduction in money market term spreads.
  - Improved pass-through from policy rates to market rates via narrower term spreads.

### Monetary transmission and crisis efficiency
- Core transmission channel (policy rates → market rates):
  - Continued to function during the global financial crisis.
  - Functioned at a decreased efficiency relative to non-crisis periods.
- Balance sheet effects:
  - Substantial increase in the ECB's balance sheet is associated with a reduction in government bond term spreads.

### Key statistics and identifiers
- Pages: 34
- Volume: 2009
- Issue: 185
- Series: Working Paper No. 2009/185
- DOI: https://doi.org/10.5089/9781451873320.001
- Stock No: WPIEA2009185
- ISBN: 9781451873320
- ISSN: 1018-5941

*By Emil Stavrev, Thomas Harjes, Martin Cihak; August 1, 2009.*

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/euro-area-monetary-policy-in-uncharted-waters-23241_