This episode provides a clear example of the importance of transparency in establishing credible expectations and thus increasing the impact of monetary policy. Anticipation of further easing measures had started to set in from the summer of 2014, in line with a progressive deterioration in the price outlook and the contingency plans we had laid out.
Long-term nominal interest rates declined by around 100 bps from then until our January decision, precisely because we had communicated our reaction function and markets understood it. This is one reason why we have already been seeing positive effects, even though large-scale purchases of government securities only began in March this year.