Policies to preserve stability, restore confidence and foster economic recovery  Over the past five months, since the financial turmoil intensified and economic conditions deteriorated substantially, central banks and governments have taken unprecedented measures to preserve stability and cushion the impact of the financial crisis on the economy: •  unprecedented have been the measures taken by the major central banks since the eruption of the crisis, as judged (i) by the size and frequency of money market operations to provide liquidity; (ii) by the enlargement of the pool of eligible collateral and the expansion of their balance sheets; (iii) by the speed and magnitude of monetary policy easing since October 2008; and (iv) – in some cases – by the use of unconventional or non-standard policy tools;  •  unprecedented have been the measures taken or announced by governments (i) to support the banking sector through recapitalisations, government guarantees on bank debt, and asset-relief schemes; and (ii) to stimulate aggregate demand through fiscal packages.
The policies implemented so far have helped to stabilise the banking system and to mitigate the effects of the financial turbulence on the economy. Nevertheless, financial stresses remain and economic conditions are deteriorating in Europe and throughout the world.