Bernhard Winkler

European Central Bank

Friday 31st Oct, 10:30-12:00 Seminar Room 1
Oxford Martin School
34 Broad Street, Oxford OX1 3BD


This paper reviews how the ECB used its balance sheet capacity during the financial crisis in comparison with the US Federal Reserve and provides a flow-of-funds perspective on the ECB’s non- standard measures. It argues that central bank balance sheet policies not only matter through size and composition, but also via contingent commitments that have no immediate reflection in the balance sheet. The paper provides a typology of non-standard measures by sector and instrument and sets out the related transmission channels. It examines the extent to which the central bank liquidity support to banks has translated into lending to the private sector vs. providing support to government and corporate bond markets. The paper argues that a broader range of financing sources of corporates deserve consideration, including trade credit and trade bills, as traditional means of central bank liquidity provision to the real economy.