High financial market uncertainty together with deleveraging pressures on banks’ balance sheets also affected money growth, which diminished towards the end of the year. In view of this, the Governing Council subsequently reduced the key ECB interest rates in November and December by a total of 50 basis points. Since then, rates have remained at the historically low level of 1.0%.
As financial market tensions adversely affected the monetary policy transmission mechanism, the Governing Council also adopted a range of non-standard monetary policy measures as of August 2011. These included the reactivation of the Securities Markets Programme, the launch of a second covered bond purchase programme and measures to provide liquidity in foreign currencies.