That being said, monetary policy responsibility can not substitute for government irresponsibility. Excessive government borrowing by some Member States led to a seizing-up of the market for government paper. This market plays a central role in our financial system and constitutes a crucial element in the transmission of monetary policy to the real economy.
Fire sales of government bonds imply a sharp deterioration in banks’ funding conditions. Confronted with a serious dysfunction in important segments of financial markets, the Governing Council of the ECB decided to intervene.