In this way, the ECB allowed banks to refinance their assets using its own credit, rather than through asset fire sales in the market. A situation in which sound and solvent banks became insolvent was thus avoided.
In order to reassure banks that access to central bank liquidity would indeed be extended in line with their refinancing needs in the medium term, we extended the maturity of our credit lending from the standard three months pre-crisis, to six months after the collapse of Lehman Brothers, to one year by mid-2009 and, finally, to three years at the end of 2011.