Subsequently, it implemented measures to provide ample liquidity to financial markets, such as increasing the amount of outright purchases of Japanese government bonds and introducing U.S. dollar funds-supplying operations against pooled collateral. In Japan, it was the CP market that faced a particularly serious shortage of liquidity as market participants withdrew their funds from the market, fearing the risk of corporate failures.
The public, and also the markets, have lost faith – in politics, but also in the architecture of monetary union. The question is: how do we go about restoring confidence? Let me begin by stating clearly what won’t work. Confidence cannot be sustainably restored by putting more and more money on the table – for instance, by constantly ramping up the rescue funds.