In the aftermath of the failure of Lehman Brothers, the ECB launched its policy of “enhanced credit support”, a series of measures to enhance the flow of credit above and beyond what could be achieved through policy interest rate reductions alone.
These measures include the unlimited provision of liquidity through “fixed rate tenders with full allotment”; the provision of liquidity at lengthened maturities of up to one year; and the provision of more liquidity in foreign currencies to euro area banks and of euro liquidity to other central banks for them to provide to their local banks; and a programme of purchases of covered bonds.