In essence, this meant providing ample liquidity for a much longer period than under the ECB’s standard operations. In mid-2014, however, when downside risks to the inflation outlook intensified, additional accommodation was required. Negative interest rates were a crucial part of the measures that the Governing Council adopted at the time.
By the end of 2012, 80 percent of the banks’ deposit base had been lent out to the private sector and private sector credit as a share of GDP had risen to 15 percent. In the twelve years since the end of 2000, bank lending to the private sector has risen five fold in real terms.