The ECB, for its part, has committed to preserve favourable financing conditions for as long as necessary, reinforcing the fiscal response. The complementarity of fiscal and monetary policy has been instrumental in effectively countering the pandemic crisis. When the health crisis has been successfully overcome and authorities start to phase out the relief measures, this complementarity should remain an important consideration.
Thank you for your attention. [1] I would like to thank Sandor Gardo and Benjamin Hartung for their contributions to this speech. [2] The financial stability risks associated with a tightening nexus between sovereigns, banks and corporates in the wake of the COVID-19 pandemic are analysed in the ECB’s latest Financial Stability Review (November 2020).