27 This prompts a more delicate question about how much heavy lifting monetary policy should actually do.28 Most countries have some automatic fiscal stabilizers in place, such as unemployment insurance or a progressive income-tax schedule, which help during a downturn.
These developments are indicative of the increased trust among banks in the euro area – a development due largely to the decisive action undertaken by the ECB. Looking at other important money markets (such as that of the United States or the United Kingdom), we see that there, too, interest rate spreads have narrowed at a similar rate.