Without ACCs, many firms would not have benefitted from the liquidity injection. Besides the bank lending channel, our credit easing policies also influenced the euro area economy through the exchange rate channel. The nominal exchange rate is one of the asset prices that we pay particular attention to because of its impact on the inflation rate.
Dedola and co-authors (2016) document the effectiveness of our balance sheet policies on the exchange rate and their transmission to prices and economic activity in a careful empirical analysis. It is notable that the authors find significant exchange rate effects predominantly emanating from a reduction in international financial distortions achieved by our liquidity policies.