But he was no slave to them; rather, he mastered and reinterpreted them, and turned them into food for thought. Mundell’s theory of optimum currency areas offered a critique of the overlap between “money” and “state”, a link which, in the early 1960s was still considered as immutable and irreversible.
Collectively, they engaged in a large-scale process of “deleveraging”. Banks’ intermediation was reduced in the aggregate, and loans to companies were curtailed. The credit squeeze and the toll on the real economy set in. ECB policy actions in the financial crisis As I have said, the ECB has taken swift and forceful action to mitigate the effects of the crisis as events have unfolded.