Honourable Members, please allow me to preface my response by saying that the Reserve Bank grants special lending facilities to address specific areas that may be impeding economic development and growth. From a national or macro perspective, these facilities do provide positive benefits.
Therefore, the main immediate policy challenge is to prevent the emergence of a strong adverse feedback loop between the real economy and the financial sector. Before examining the effectiveness of the policies being pursued to address this challenge, let me briefly refer to the impact of the crisis on the economy and the financial system of the euro area.