10  S. Demiralp, J. Eisenschmidt and T. Vlassopoulos, (2016), “The impact of negative interest rates on bank balance sheets: Evidence from the euro area”, ECB mimeo. 4  BIS central bankers’ speeches  question whether the second leg of the transmission – from financial conditions to real activity and inflation – is still intact.
Of course, the fact that this easing has occurred concurrently with the economy receiving new shocks poses a fundamental identification problem. Or put another way, we have to be careful to avoid assessing monetary policy by “looking out the window”.