Abstract
The Eurozone crisis and its aftershocks have forced the ECB to move into uncharted territory. Historically low interest rates and even negative deposit rates, various asset purchase programs, bank liquidity support, forward guidance, and recently open-ended quantitative easing (QE) have all been used to address tail risks from sovereign and bank sector shocks and deflation risks. The ECB has become the subject of criticism because of these measures. Some have argued that it has been behind the curve, acting too late and not aggressively enough. Others have argued that the central bank has already gone too far. The verdict is still out, but the fact is that the ECB’s crisis management has so far avoided the worst and the euro has survived for now, but the Eurozone’s recovery has been very weak.
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References
Melander, Ola, Miguel Segoviano, Malika Pant and Athanasios Vamvakidis (2011). “Dancing spreads: Market assessment of contagion from the crisis in the euro periphery based on distress dependence analysis.” International Advances in Economic Research, 17.
Vamvakidis, Athanasios (2009). “Is there a “Reform Fatigue” in the euro area?” Economic Modelling, 26.
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© 2015 Athanasios Vamvakidis
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Vamvakidis, A. (2015). ECB Monetary Policy and the Euro during the Crisis. In: Thomakos, D.D., Monokroussos, P., Nikolopoulos, K.I. (eds) A Financial Crisis Manual. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, London. https://doi.org/10.1057/9781137448309_4
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DOI: https://doi.org/10.1057/9781137448309_4
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-137-44829-3
Online ISBN: 978-1-137-44830-9
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