the extent to which the funding cost relief for banks will be passed along to their borrowers. This is because the ABS market remains severely impaired. As a consequence, the potential for interventions to change dynamics in this particular market is high.
Certainly it was well-timed (lesson 1), though some observers will have hoped for this or more at an earlier stage, and can note that, despite its scale and duration, it has not brought, for example, Irish sovereign spreads below the levels that triggered the bail-out in November 2010. Let’s hope that lesson 2 applies, and that it will be of lasting value.