In particular, by pursuing the second objective, the Eurosystem aimed to contribute to reestablishing confidence among market participants and to safeguarding financial stability, while also supporting the appropriate functioning of the monetary policy transmission mechanism. Contributing to the stability of the financial system is among the tasks assigned to the Eurosystem by the Treaty establishing the European Union under Article 105(5).
Ensuring the smooth functioning of the money market is crucial for central banks since the short-term segments of the money market represent the first step along the mechanism of transmission of monetary policy impulses, and their impairment may complicate the signalling and implementation of the desired policy stance. What did the Eurosystem do in practice?