This led to intensified concerns over the financial health of European financial institutions holding large amounts of these bonds. These institutions, for their part, tightened their lending stance because of liquidity concerns, which in turn affected economic activity.
Since the end of 2011, however, concerns over European financial institutions’ liquidity have been receding thanks to the implementation of 36-month longer-term refinancing operations with full allotment by the European Central Bank (ECB) and to the lowering of interest rates on the U.S. dollar funds-supplying operations decided on in coordinated action by the six major central banks, including the Bank of Japan.