Slide 4 PEPP highly effective in stabilising financial markets  In doing so, it saved millions of jobs and businesses. Its strong impact on the economy was in line with a rich literature that suggests that monetary policy is most effective during periods of market turmoil or when the economy is in a severe recession.
[5] In these circumstances, a tightening of financial conditions damages the economy more severely due to a negative multiplier effect (see left chart slide 5). Monetary policy that acts to offset a tightening in financial conditions is then highly effective.