All in all, the monetary policy actions and the rescue schemes for banks in stress have helped to stabilise the financial system at a time when systemic stability was at risk. Thus, they have put a floor under the tail risk of a self-enforcing uncontrolled downward-spiral from feedback effects between the financial and the real spheres.
However, monetary policy has created an enormous expansionary stimulus – not just in the euro area but also worldwide. While this stimulus is currently warranted, we have to keep in mind that it has to be reduced or even inverted very quickly as soon as the overall situation improves.