Should this be the case, macroprudential policy – not monetary policy – would be the tool of choice to address these risks.
From the ECB’s perspective, the swap line serves as a backstop facility to address sudden and temporary disruptions in the RMB market owing to liquidity shortages, so as to reassure market participants that a safety net is in place to address possible future market malfunctioning and reassure euro area banks regarding the continuous provision of RMB.