A tightening of the Fed’s policy is likely to lead to further capital outflows from EMEs as investors search for rising returns in the US, which in turn might imply a depreciation of EMEs’ currencies, a rise in their interest rates, economic slowdown, etc. 2.
The ECB’s monetary policy The ECB did a great deal to help combat the crisis, starting with the banking turmoil in 2008, the sovereign debt crisis from 2010 onwards and later the prolonged low inflation. In doing so, it took a number of measures. Some of them form part of conventional monetary policy, others are new or, at least for the euro area, unusual.