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The European Central Bank Quantitative Policy and Its Consistency with the Demand for Liquidity

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  • Hlebik Sviatlana

    (Cariparma Crédit Agricole, Financial Management Directorate, Parma, Italy, Ph.D.c Università Cattolica, Milano, Italy)

  • Verga Giovanni

    (Parma University, Parma, Italy; Laboratorio di Analisi Monetaria, ASSBB, Milano, Italy)

Abstract

In 2008 the European Central Bank added a new quantitative policy strategy to its traditional control of the interest rates. This new policy, sometimes called “enhanced credit support”, consists of fully satisfying the demand for liquidity of banks, with the European Central Bank deciding only the timing and characteristics of its interventions. This study analyses the market conditions in which these measures have been taken and their consistency with the demand for liquidity by the banking system. Measures in favour of the sovereign debt of PIIGS countries are also considered.

Suggested Citation

  • Hlebik Sviatlana & Verga Giovanni, 2015. "The European Central Bank Quantitative Policy and Its Consistency with the Demand for Liquidity," Scientific Annals of Economics and Business, Sciendo, vol. 62(3), pages 425-451, November.
    • Handle: RePEc:vrs:aicuec:v:62:y:2015:i:3:p:425-451:n:11
    DOI: 10.1515/aicue-2015-0029
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