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ECB policy responses between 2007 and 2014: A chronological analysis and an assessment of their effects

Rodríguez Carlos (University of the Basque Country UPV/EHU, Department of Applied Economics V, Spain)
Carrasco Carlos A. (Universidad de Monterrey, Mexico)

The paper analyses the monetary policy responses of the European Central Bank (ECB) to the global financial crisis and the European sovereign debt crisis. Our goals are on the one hand to explain chronologically the main measures in conventional and unconventional policies adopted by the ECB and on the other hand to analyse their effects on key interest rates, monetary aggregates and the money multiplier. The assessment is that the ECB’s monetary policy responses to the crisis have been “too little, too late”, constrained by the institutional framework, which prevents the ECB from acting as a true central bank with the role of lender of last resort.

Keywords: ECB, unconventional monetary policy, money multiplier, monetary aggregates, European crises