It also has implications for the functioning of financial markets, most notably safe assets and bond pricing. A theme of the ECB’s strategy evaluation that has therefore become even more important is to what extent unconventional monetary policies create policy space and thus help to overcome the effective lower bound. To me, the answer is state dependent.
For instance, there is ample evidence that asset purchases are more effective at times when market frictions or stress are the highest. As the Covid-19 crisis unfolded, in the euro area this was most visible in the fragmentation of bond markets.