If left unaddressed, funding tensions would have led to impairments in the euro area monetary policy transmission mechanism, with adverse consequences on the provision of credit, the real economy, and ultimately inflation. As history has taught us, a liquidity crisis could have triggered a wave of bankruptcy, leading to a Great Depression scenario. Thanks to our non-standard measures, this scenario did not materialise.
The difference between the interest you pay and the interest you earn on the transaction determines the implied forward rate ten years from today. 3  Far-forward rates in yen are up almost 2 percentage points from their historic lows in the second quarter of 2003, but they are at a level that is obviously still low in a historical context.