When, in mid-September 2008, interbank trading came to a virtual halt, the ECB temporarily generalised this particular model of liquidity provision: since autumn of last year the unlimited provision of liquidity through “fixed rate tenders with full allotment” has comprised the first important building block of our policy of enhanced credit support.
The task is easier still as we remind ourselves of the stark difference between the long-term prospects of our economy now, in our current environment of stability, and then, a quarter-century ago, before the reforms of that October. In closing, I applaud President Poole and his colleagues for organizing this event to reflect upon that critical episode in our nation’s economic history.