Reducing financial dominance The classic function of a central bank is to provide liquidity to solvent banks. And the ECB has unquestionably fulfilled this role even during the crisis. Our lending to banks rose by more than € billion from 2008 to the height of the crisis in 2012.
If the ECB had not provided liquidity, there would have been bailouts, abrupt debt reduction and thus a deepening of the recession – and this would have made our mandate of ensuring price stability much more difficult. However, there is no doubt that this lending entails risks for the central bank.