Since the GFC, our tool kit has deepened. We are no longer limited to the policy rate alone to address these impulses. For instance, under the IRC, the auction size of the TDF is one tool that we could use.
This increase in the size of the balance sheet corresponds to a higher level of outstanding refinancing operations, and has consequently increased the amount of risk borne by the Eurosystem. Since its peak in December, the size of the Eurosystem’s balance sheet has declined by around € billion to 15% of GDP in May 2009.