Transmission channels of unconventional monetary policy in the euro area: where do we stand?

In-Depth Analysis 15-11-2016

To ease credit and financing conditions for firms and households, in recent years the ECB has taken a number of unconventional (non-standard) monetary policy measures. These measures include the provision of liquidity through the direct purchase of private and government assets (direct quantitative easing), the purchase of commercial paper, corporate bonds and asset-backed securities to address liquidity shortages and spreads in certain market segments (direct credit easing), the flattening of the yield curve by lending to banks at longer maturities (indirect quantitative/credit easing) and, finally, the commitment to keep long interest rates low over an extended period (forward guidance). Taking stock of available empirical evidence, the notes in this compilation provide an assessment of these measures. The notes have been requested by the Committee on Economic and Monetary Affairs as an input for the November 2016 session of the Monetary Dialogue.