DOI 10.1515/rebs-2017-0051Volume 10, Issue 1, pp.129-155, 2017ISSN-1843-763XTHE FINANCIAL CRISIS RESPONSE. COMPARATIVEANALYSIS BETWEEN EUROPEAN UNION AND USAFLORENTINA MELNIC*Abstract: This paper reviews the measures adopted by central banks from the mostimportant economies during the crisis and assess their effectiveness. It is important forpolicy makers to identify which measures were effective in limiting the financial systemdistress in order to adopt the appropiate measure during future crisis. In case of US, TARPwas the most important program for banking system and it was effective in reducing banks’contribution to systemic risk and banks’ default probabilities. But TARP also conducted to areduction in loans growth and create incentives for higher risk-taking behavior. Theunconventional monetary policies adopted by ECB during the period 2008- 2016 reducedthe impact of the crisis on the European economy and achieved their objectives: to supportbanks’ funding and to increase lending to real economy (LTROs), to calm tensions frombond markets (CBPP, SMP, OMT), to support economic activity and to stabilize inflationrate (SMP, OMT, LTROs, APP).Keywords: unconventional monetary policy, TARP, refinancing operations, financial crisis1. INTRODUCTIONIn response to the global financial crisis central authorities around the worldadopted, in the first phase, a series of traditional rescue measures directed atindividual institutions. These measures consisted of liquidity support to failinginstitutions, that, subsequently, were sold or merged with stronger parteners 1. The*1Florentina Melnic, PhD. Student Alexandru Ioan Cuza University of Iasi, email:florentina [email protected] can mention here the case of Bear Stearns from the United States that was sold to JPMorganChase (March 2008), Northern Rock and Bradford and Bingley from UK nationalised in February2008, respectivelly, September 2008 (and partly sold to Santander), SachesenLB from Germanysustained with liquidities (August 2007), and eventually merged with LBBW (April 2008).

130Florentina Melnictakeover of Fannie Mae and Freddie Mac by the government and the collapse ofLehman Brothers worsen the financial conditions and send a sentiment ofuncertaintly among participants, that led to a drying up of funding markets (Stolz &Wedow, 2010). The shock generated by the Lehman Brothers’ collapse and theliquidity pressures were felt rapidly by the European banking systems.In this situation, the Federal Reserve and European Central Bank wereforced to adopt non-standard measures designed to ease credit and liquidityconstraints in order to restore financial stability and to maintain the lending to realeconomy (Carpeter, Demiralp, & Eisenschmidt, 2014). The measures implementedrefer to expansion of the volume of lending facilities, longer-term financing, morefrecvent auctions or even changes in the auctining process, a wide range ofaccepted collateral, direct asset purchases and liquidity facilities for intermediariesother than banks (Stolz & Wedow, 2010).In general, the measures implemented in EU have been broadly similar tothose adopted in the US. In both cases, the authorities have employed broadly thesame tools (e.g. government guarantees, capital and liquidity injections, and assetprotection) and have relied on a mix of ad hoc measures for individual institutionsand schemes addressing the wider needs of the financial system. But, there are alsosome differences between the policies adopted in the US and the EU. The measuresadopted by Federal Reserve System have been more expansive and have targetedalso individual financial intermediaries, while the European Central Bank actionshave been limited to liquidity extension. Another difference between the policiesadopted in these two economies refer to the fact that capital injections were arequirement in the US, while in Europe capital support has typically been voluntary(Stolz & Wedow, 2010).In this paper, we review the unconventional measures adopted by FederalReserve System and European Central Bank and assess their effects. It is importantfor policy makers to establish which measures were effective in limiting thefinancial system distress in order to adopt the appropiate measure during futurecrisis. For US, TARP was the most important measure for banking system, USTreasury investing 245 billion in financial institutions. TARP was effective inreducing banks’ contribution to systemic risk, in reducing banks’ defaultprobabilities, but conducted to a reduction in loans growth and higher risk-taking.The unconventional monetary policies measures adopted by ECB during the period

The Financial Crisis Response. Comparative analysis between European Union and USA2008- 2016 achieved their objectives: to support banks’ funding and to increaselending to real economy (LTROs), to calm tensions from bond markets (CBPP,SMP, OMT), to support economic activity and to stabilize inflation rate (SMP,OMT, LTROs, APP).2. US RESPONSE TO FINANCIAL CRISIS2.1. Policy interventions during financial crisisThe US central authorities implemented during financial crisis a range ofprograms to sustain the affected sectors: small business, auto industry, financialmarkets, final consumers, pension funds and housing market. In this section wefocus on the financial markets’ measures, but mainly on bank based measuresadopted by the American authorities. The authorities that have the power tointervine into American economy are Feb, FDIC and the Government.Measures directed to financial marketsThe measures adopted by the Fed had a direct or indirect impact onfinancial institutions or financial sectors. For exemple, the Recovery Act throughthe tax relief applied to the American taxpayers improved the financial conditionsof banking clients. The supplementary amount could be used to obtain a largeramount of loans or to deposit it.2The main programs adopted by central bank that meant to support financialmarkets were: Term Asset-Backed Securities Loan Facility (TALF), CommercialPaper Funding Facilities (CPFF), Asset-Backed Commercial Paper Money MarketMutual Fund Liquidity Facility (AMLF), Primary Dealer Credit Facility (PDCF),and Term Securities Lending Facility (TSLF).323According to U.S. Department of the Treasury the tax relief appointed in The American Recoveryand Reinvestment Act of 2009 (February 17th), will deliver an estimated 150 billion of directrelied to Americans and their families. This program was designed to stimulate the US economyby investing in infrastructure, job creation, educational opportunities, improve health care ages/recovery-act.aspxCPFF was created on October 2008 and closed in February 2010; AMLF was announced onSeptember 2008 and closed on February 2010; PDCF was launched in March 2008 and closed onFebruary 2010; the first auction of TSLF was on March 2008 and the program was closed onFebruary 2010.131

Florentina Melnic132Table 1 US Government response to financial crisisComponentsProgramsSectorsFederalReserve Financing programs Large banktestsTARPinvestmentprogramsstressbankRecovery ActTALF credit marketprogramFDICbankdebtinsurance programTARP auto tioneffortFannieMae/FeddieAsset-backed commercial paper moneySmall Business,market mutual fund liquidity facilityAutoCommercial paper funding facilityIndustry,Currency swap lines with internationalFinancialcentral banksMarkets, Money-market investor funding facilityConsumers, Primary dealer credit facilityRetirement, Term auction facilityHousing Term securities lending facilitySmall Business, Auto Industry, Financial Markets, Consumers,Retirement, Housing Capital Assistance Program (CAP)Small Business, Capital Purchase Program (CPP)Auto Community Development CapitalIndustry,Initiative (CDCI)Financial Asset Guarantee Program (AGP)Markets, Targeted Investment Program (TIP)Consumers,Retirement,HousingSmall Business, Auto Industry, Financial Markets, Consumers,Retirement, HousingSmall Business, Auto Industry, Financial Markets, Consumers,RetirementSmall Business, Auto Industry, Financial Markets, Consumers,Housing GM/Chrysler restructuringsSmall Business, Auto supplier support programAuto Auto warranty commitment entSmall Business, Financial Markets, Consumers, RetirementSmall Business, Financial Markets, Consumers, RetirementFinancial Markets, Consumers, RetirementFinancial Markets, Consumers, Retirement, Housing

The Financial Crisis Response. Comparative analysis between European Union and USAMac stabilizationeffort Foreclosurepreventionand refinancing initiativesMaking Home Affordable (MHA)FinancialHome Affordable Modification ProgramMarkets,(HAMP)Consumers,Home Affordable Refinance ProgramRetirement,(HARP)Housing Other federal loan modificationprograms Hardest Hit Fund Neighborhood Stabilization ProgramLegacySecurities Financial Markets, Consumers, s Small Business, Financial Markets, ConsumersAdministrationlending sCreditInitiativeTreasure mortgage- Financial Markets, Consumers, Housingbacked securitiespurchase programSource: U.S. Department of the Treasury, 2013. The Financial Crisis Five Years Later.Response, Reform, and Progress, nancialCrisis5Yr vFINAL.pdfTALF4 was created to support market participants to meet the credit needs ofhouseholds and small businesses by supporting the issuance of asset-backedsecurities. In order to restore liquidity in short-term debt markets, Fed recourse toCPFF and AMLF. CPFF was designed to provide liquidity to US issuers ofcommercial paper by purchasing highly rated unsecured and asset-backedcommercial papers. AMLF had the objective to facilitate the sale of assets bymoney-market mutual funds in the secondary market to increase their liquidity.Dealers were sustain through PDCF and TSLF. PDCF referred to an overnight loan4TALF was a joint Federal Reserve - Treasury program, launched in March 2009 and closed in June2010. The final outstanding loan was repaid in October 2014.133

Florentina Melnic134facility that provided funding to primary dealers in exchange for a specified rangeof eligible collateral. TSLF provided liquidity to Treasury and other collateralmarkets by lending Treasury securities held by System Open Market Account toprimary dealers against eligible collateral. Mortgage market was supported byFed’s actions of direct purchase of securities issued by Fannie Mae and FreddieMac and of the mortgage-backed securities guaranteed by these institutions. Otherindividual institutions that were supported by Fed were Bear Stearns and AIG.Measures directed to banking systemThe main bank based measure adopted by Fed was Term Auction Facility. Theobjective of this facility was to provide liquidity to financial institutions in the earlystages of the crisis when the bank funding markets confronted with severe pressure.This program was established in December 2007 based on the discount window.Through this program, Fed auctioned loans to a broader range of financially sounddepository institutions against collateral. During the period 2003-2006, discountwindow and TAF usage averaged 170 million per day, while during the financialcrisis (August 2007 to December 2009) both facilities averaged 221 billion per day(Berger, Black, Bouwman, & Dlugosz, 2017). Based on Federal Reserve data 416different banks benefit from this program, that ended on March 2010.The American Government launched the Troubled Asset Relief Program(TARP5), one of the most important measure for banking system. The aim of thisprogram was to ensure the stability of banking system by purchasing mortgagerelated toxic assets and by injecting capital into banks. The intermediary objectivesof TARP program were to restore liquidity to a market with frozen credit, promoteeconomic growth, curb unemployment and to prevent foreclosures. This wasfollowed through several sub-programs with different objectives: Asset GuaranteeProgram (AGP), Supervisory Capital Assessment Program (SCAP) and CapitalAssistance Program (CAP), Capital Purchase Program (CPP), CommunityDevelopment Capital Initiative (CDCI) and Targeted Investment Program (TIP).As of February 2017, the only programs that have oustanding investments are5Part of the United States’ Emergency Economic Stabilization Act (EESA), signed into law byPresident Bush on October 3, 2008

The Financial Crisis Response. Comparative analysis between European Union and USACapital Purchase Program (0.19 billion dollars) and Community DevelopmentCapital Initiative (0.10 billion dollars) (US Department of the Treasury, 2017).Through TARP bank investment program, Treasury invested 245 billion infinancial institutions, being considered the largest government bailout in the UnitedStates history (Montgomery & Takahashi, 2014). The impact of the adoptedmeasures on the Fed’s balance sheet can be observed in Graphic no 1.Graphic 1 The evolution of the FED’s balance sheet during 2002-2017 (million US)Fed Balance s Held OutrightTotal AssetsSource: Federal Reserve Bank of Louis, Federal Reserve Economic Data – & largest program within TARP was Capital Purchase Program (CPP) towhich have been allocated approximately 205 billion that were invested in 707financial institutions from 48 states (Office of Financial Stability, 2013). Under thisprogram banks could sell equity to the Treasury of maximum 25 million or 3% ofits risk-weighted assets with a dividend rate of 5% for the first five years and 9%thereafter. The first funds were disbursed on October 28, 2008 to the biggest USfinancial institutions including Goldman Sachs Group, Morgan Stanley, Bank ofAmerica, Citigroup, JPMorgan Chase and Wells Fargo & Co (Semaan & PetersonDrake, 2016). As of February 2017, there have been recovered from CPP program 226.7 billions through repayments, auctions, dividends, interest and warrantincome, mening an additional return for the taxpayers.135

136Florentina Melnic2.2 The effectiveness of policy interventions in USDiscount window and TAF program were the first programs aimed to sustainthe US financial system. Berger, Black, Bouwman, & Dlugosz (2017) studied theefects of these facilities on bank lending, concluding that the received funds wereused to increase lending by both small and large banks. The positive effects of TAFprogram were confirmed by Frank & Hesse (2009) this program being effective inreducing the LIBOR-OIS spread, but the economic magnitude was not very large.In contrast, Taylor & Williams (2008) found that TAF had no significant effect onLIBOR-OIS spreads.In their retrospective report, US Treasury sustain that TARP helped stop thewidespread of financial panic, prevented what could have been a devastatingcollapse of the American financial system and helped many strugglinghomeowners to keep their homes (Office of Financial Stability, 2013).However, literature offers divided opinions regarding the effectiveness ofTARP program. There are studies that sustain the effectiveness of TARP programin reducing banks’ contribution to systemic risk (Berger, Roman, & Sedunov,2016), in reducing banks’ default probabilities in the short term (Calabrese,Degl'Innocenti, & Osmetti, 2017), mitigating the propagation of housing marketshocks across US (Jang, 2016), in reducing stock market volatility (Huerta, PerezListon, & Dave, 2011) and in creating real economic value through job creation(Berger & Roman, 2015). In contrast, the implementation of TARP conducted to areduction in loan growth (Montgomery & Takahashi, 2014; Black & Hazelwood,2013), higher-risk loans and risk-taking (Duchin & Sosyura, 2014; Black &Hazelwood, 2013), increase systemic risk (Farruggio, Michalak, & Uhde, 2013),declined operational efficiency (Harris, Huerta, & Ngo, 2013).The immediate effect of TARP’s announcement on financial markets wasnegative, deepening the uncertainty. The announcement was made in the secondweek after the decision not to intervene in Lehman Brothers by Federal ReserveBoard Chairman Ben Bernake and Treasury Secretary Henry Paulson providing a2½-page draft with no mention regarding the oversight and a few restrictions on theuse. The uncertainty and the confusion about the procedures or criteria for futuregovernment intervention to prevent financial institutions from failing increased riskspreads in the interbank market. The original idea of TARP of buying troubledassets from financial institutions was changed as it was not clear how it will work.

The Financial Crisis Response. Comparative analysis between European Union and USAThe announcement that this program would simply inject capital into banksimproved the financial conditions, removing the uncertainty. However, the longerterm effects on different variables are questionable.Through TARP’s capital injections, FED wanted to increase confidence inbanks and to stimulate bank lending. Literature provides evidence regarding thefailure of this program to achive the latter goal (Montgomery & Takahashi, 2014;Black & Hazelwood, 2013; Duchin & Sosyura, 2014). Montgomery and Takahashi(2014) analyzed 9042 commercial banks for the period of 2001-2010 and foundevidence that banks that received capital injections through TARP programreduced their loan growth. Taliaferro (2009) reports evidence that banks thatreceived funds under CPP program used them to strengthen their capital position(about sixty cents of every dollar received) rather than support lending (thirteencents of every dollar received). The evolution of bank lending during financialcrisis has been documented by Ivashina and Scharfstein (2010), concluding that inthe final quarter of 2008 there was a sharp drop in the new loans (credit lines)provided to large borrowers of 47% compared to the previous quarter of 2008. Thelack of liquidity to finance larger businesses, determined banks to shift their loansto smaller and riskier businesses. Puddu and Walchli (2014) concluded that TARPbanks provided higher new loans to small business of about 19% than no TARPbanks in the years after receiving TARP equity (2008-2010). Li (2013) concludedthat one-third of the TARP funds was directed to new loans while the rest was keptto strengthen their balance sheets.Current research sustain the fact that banks shifted their portofolios towardriskier borrowers and the manifestation of moral hazard (Black & Hazelwood,2013; Duchin & Sosyura, 2014). Black & Hazelwood (2013) concluded that,compared with non-TARP banks, large banks that received TARP capital increasedthe risk of the new granted loans, while small banks decreased it. The increasedlevel of banks’ risk-taking in the absence of increased lending may be the result ofmoral hazard, the offered bailout creating the perception for ‘Too-big-to-fail’ banksof implicit government support going forward. This result is confirmed by Duchinand Sosyura (2014) who found that an increase in banks’ capital did not conductedto a credit expansion, but instead lead to riskier lending and investments, TARPbanks offering favorable loan contract terms especially to high-risk borrowers(Berger, Makaew, & Roman, 2016). Wilson & Wu (2010) provide evidence137

138Florentina Melnicregarding the fact that banks that face insolvency and participate in a preferredstock recapitalization are tempted to reject good loans and accept the bad ones inorder to shift risk to their creditors. This suggest that the size of the capitalinjection and the lack of any leverage-increasing limit may have lead toinefficiency in the TARP program.Farruggio, Michalak & Uhde (2013) revealed a light and a dark side ofTARP program. They studied the impact of both announcements of TARP program(initial and revised), of capital injections and capital repayments on changes inbank shareholder value and risk exposure of 125 recipient banks. In their study, thedark side of this program refers to the fact that the announcements of TARPprogram as well as capital injections increased systemic risk. Capital injections areperceived by investors as a signal of higher expected default risk of supportedbanks. On the other hand, the announcements of TARP and capital repaymentsincreased bank shareholder value. These results are confirmed by Ncube (2016)who concluded that the announcement of TARP program increased investors’confidence, but the receipt of TARP funds determined a negative market reactionwith important stock price declines. Another negative effect of TARP capitalinjections was the reduction in operational efficiency for TARP recipients banks.Harris, Huerta, & Ngo (2013) argue this result through the moral hazard generatedby bailouts, the political pressure to increase lending that reduced loans quality, therequirements imposed by TARP program and the government involvement in bankmanagement decisions.In contrast with the previous work, there are studies that prove the positiveeffects of TARP program on US banks (Berger, Roman, & Sedunov, 2016;Calabrese, Degl'Innocenti, & Osmetti, 2017; Jang, 2016). Berger, Roman, &Sedunov (2016) empirically demonstrated that TARP program reduced banks’contributions to systemic risk, but especially for larger and safer banks located inareas with better economic conditions. Furthermore, Calabrese, Degl'Innocenti, &Osmetti (2017) sustain that Capital Purchase Program, the largest bank bailoutprogramme under TARP, helped banks to reduce their default probabilities in theshort term, during the peak of financial crisis. This is confirmed by Croci, Hertig,& Nowak (2015) study, suggesting that bailing-out more banks would have

The Financial Crisis Response. Comparative analysis between European Union and USAreduced the number of banks that were subject of FDIC resolution process 6.Another positive effect of TARP program, highlighted by Liu, Kolari, Tippens, &Fraser, (2013) was the CPP banks’ stock prices recovery and, furthermore, largeand significant gains after the repayments of CPP funds.To conclude, the literature does not offer a general accepted opinionregarding the overall effect of TARP program on US banking system. This effect isdepending on the analyzed time-horizon (short vs. long term), the different stagesof TARP program (announcements, capital injections or repayments), thecomputation of dependent variables (e.g. systemic risk vs. lending growth) and theindependent financial variables used. Calabrese, Degl'Innocenti, & Osmetti (2017)concluded that TARP program reduced banks’ default probabilities on the shortterm, while Semaan & Peterson Drake (2016) concluded that the idiosyncratic riskof CPP participants remained higher compared to those not participating in CPPfour years following CPP. Regarding the impact of TARP equity on systemic riskBerger, Roman, & Sedunov (2016) estimated systemic risk through NormalizedSRISK and Systemic Expected Shortfal, while Farruggio, Michalak, & Uhde(2013) defined systemic risk as the change in the correlation of bank stock returnswith returns of the market portfolio. Both studies have obtained conflicting results.3. EU RESPONSE TO FINANCIAL CRISISTraditionally, the ECB provides to central banks two standing facilities thatcan be used on their own initiative whenever they need liquidity or to depositliquidity. These facilities refer to Marginal lending facility and Deposit facility butnormally banks use them in the absence of other alternatives, as the interest ratesare higher, respectively lower than money market rates.3.1. Policy interventions during financial crisisTo manage the liquidity in the money market, ECB uses, through NationalCentral Banks, open market operations. The most important operations are Mainrefinancing operations (MROs) and Longer-term refinancing operations (LTROs).Another instrument used by ECB to manage liquidity is the Minimum reserve6From February 2007 to March 2017, 526 banks were resolved by the Federal Deposit InsuranceCorporation - st.html139

Florentina Melnic140requirements, banks being bound to hold a specific value of their liabilities asdeposits to central banks. The reserve ratio was reduced in December 2011 to 1%from 2% as a measure to improve banks liquidity conditions (ECB, 2016). Duringthe financial crisis, ECB reacted by several interest rates rises and cuts both forrefinancing operations and standing facilities. ECB had recourse to unconventionalmonetary policy as the conventional ones proved ineffective. The ECB’s GoverningCouncil decides the measures, but the Eurosystem as a whole implements them.The European banking system faced significant losses since the fallout of thesubprime mortgage crisis in the United States. Consequently, banks started to havedoubts about the solvency of their counterparties from the interbank market, whichconducted to important shortage of liquidity and the collapse of activity in manyfinancial market segments (Boeckx, Dossche, & Peersman, 2017). To respond tothe increased and unpredictable demand of liquidity, ECB started with severalLiquidity-providing operations in July 2007. These operations continued until thecollapse of Lehman Brothers and the intensification of the financial crisis inSeptember 2008. Starting from that point, ECB implemented several monetarypolicies that were “unprecedented in nature, scope and magnitude”. The aim ofthese policies was to achieve the primary objective of price stability (HICPinflation rates below, but close to 2%) and to ensure an appropriate monetarypolicy transmission mechanism to real economy. The adopted measures during theperiod 2007 – 2016 can be analyzed in Table 2.1.On 15 October 2008, Governing Council decided that all ECB’s operationsto be carried out through fixed rate tender procedures with full allotment. Thismeans that all refinancing operations in euro and US dollars to be conductedthrough tender procedures with fixed rate (equal to the ECB’s policy rate in thecase of operations denominated in euro) and full allotment (all bids were satisfied).On the same day, Governing Council announced the extension of the collateral listand the foreign exchange swaps. Traditionally, collateral refers to marketablefinancial securities, such as bonds7 and other types of assets, such as fixed term and7Central and regional government securities, covered and uncovered bank bonds, corporatebonds, asset-backed securities and other marketable assets

The Financial Crisis Response. Comparative analysis between European Union and USAcash deposits and credit claims. In addition, ECB offered liquidities in US dollarsand Swiss francs through foreign exchange swaps.Table 2 Unconventional monetary policies conducted by ECB duringJuly 2007 – September rationsFixed interest ratewithfullallotmentforMROsandLTROsExtension of the listofcollateralassetsSwap lines with Fedand Swiss CentralBankExtension of thematurityofLTROsCoveredBondPurchasePrograms (CBPP)PeriodDetailsJuly 2007 er20088December2011 Marketable debt instruments denominated in othercurrencies that the euro, namely US dollars, theBritish pound and the Japanese yen, and issues inthe euro area Euro-denominated syndicated credit claims governedby UK law Debt instruments issued by credit institutions whichare traded on the accepted non-regular markets thatare mentioned on the ECB website Subordinated debt instruments when they areprotected by an acceptable guarantee in section 6.3.2of the General Documentation on Eurosystemmonetary policy instruments and procedures. Reduced the rating threshold for certain asset-backedsecurities Allowed national central banks to accept ascollateral additional performing credit claims ( loans) that satisfy specific eligibility criteriaBeginning with15 October2008February 2009 1. Three months (October 2008)– July 2014 2. Six months (February 2009, August 2011)3. Twelve months (June 2009, October 2011)4. Thirteen months (October 2011)5. Thirty-six months (December 2011, February 2012)1.June 2009 – Purchased in the primary and secondary markets ofJune 2010covered bonds eligible for use as collateral for2.NovemberEurosystem credit operations2011October2012141

Florentina Melnic142SecuritiesMarketProgramme(SMP)Outright ram (APP)Targeted longer-termrefinancingoperations(TLTROs)May2010- The objective of these interventions was to address theMarch 2011malfunctioning of securities markets and to restoreAugust 2011an appropriate monetary policy transmissionFebruarymechanism2012SeptemberThe differences between the two programs refer to:2012 OMTs are attached to a European Financial StabilityFacility/European Stability Mechanism programme,ensuring that the Member States remain underconsiderable pressure to implement reforms andmaintain fiscal discipline; the maturity of OMT programme is between oneand three years; publication of relevant information on OMTinterventions; the size of the programme is unlimited; Possibility to sell the bought government bondsunder OMT with their valuation based on marketprices rather than on final maturity.January 2015 – Third covered bond purchase programme (CBPP3)DecemberAsset-backed securities purchase programme (ABSPP)2017Public sector purchase programme (PSPP)Corporate sector purchase programme (CSPP)June 2014Forty-eight months (July 2014)March 2016Source: Boeckx, J., Dossche M., Peersman G., (2017), Effectiveness and Transmission of the ECB’s BalanceSheet Policies, International Journal of Central B

Chase (March 2008), Northern Rock. and Bradford and Bingley from UK nationalised in February 2008, respectivelly, September 2008 (and partly sold to Santander), SachesenLB from Germany . Home Affordable