While Korea’s policy rate was 5.25% just prior to the financial crisis, that of the US stood at 5.25% in early 2007, and the dynamic changes in the economy that saw it fall to its current 0–0.25% level within only two to three years offer us many lessons.
Eventually, the fragmentation of financial conditions became so severe that we were effectively losing the steering ability of our monetary policy for the euro area as a whole. In this environment, we once again had to act. As our main instrument, we announced the programme of Outright Monetary Transactions (OMT) in secondary government bond markets.