Our measures have helped ease pressures on the liability side of bank balance sheets that might have led to “bad” or “ugly” deleveraging. For example, in the first phase of the crisis after the Lehman Brothers failure, banks faced a funding crunch which could have led them to fire sales of assets. We helped avert this by effectively standing in for the interbank market.
Our two very long term refinancing operations (VLTROs) in 2011 and 2012 had an analogous effect in the term funding market. It is important to stress, however, that we aimed to prevent a disorderly deleveraging, not the deleveraging process itself.