The combination of our pre-pandemic and pandemic-specific monetary policy measures has successfully contributed to the stabilisation of markets and has thereby helped to ensure the smooth transmission of our monetary policy. [7] As shown in Chart 6, the PEPP has also helped contain sovereign bond yields: today, the euro area GDP-weighted yield curve is back to its pre-crisis levels.
Mindful of these risks, central banks have played a considerable role in recovering market confidence, acting as the global lender of last resort, with ample liquidity provisioning and U.S. dollar swap line arrangements. These measures have worked as a bulwark against a global negative feedback loop. Unlike the GFC, the spread of COVID-19 has been a shock to the real economy.