The provision of large amounts of short-term liquidity to the banking system is a long-standing tool of central banks used during periods of financial dislocation. The purchases of government bonds and the take-up of the TFF contributed to a further significant rise in liquidity in the banking system.
They have been sitting in as observers on key decision-making committees in each of these banks as well as conducting a number of specific investigations and reviews. The government’s crisis resolution strategy involves cleaning out a very large block of troubled property-related loans from the banks’ balance sheets and replacing them with NAMA bonds guaranteed by the government.