Work done at the Bank of Greece shows that financial conditions have responded positively to the non-standard measures, even if the measures have not yet restored inflation to its target of below, but close to, 2 per cent. However, with respect to Greece, the anticipated positive effects of the expansionary monetary policy stance have yet to be realized.
Financial conditions in Greece, whilst not at their lows of 2012, are still extremely tight by historical standards. Moreover, conditions have been virtually unchanged since the beginning of 2013, despite all the non-standard measures employed by the ECB. What factors might account for this outcome? The Eurosystem lends to commercial banks against collateral.