These conditions laid the ground for the subsequent evolution of the crisis in the euro area, which has unfolded in three main phases, each of which has required a different monetary policy response. The first phase was the immediate liquidity crisis triggered by the turning of the global financial cycle and the subsequent collapse of Lehman Brothers.
As in other advanced economies, euro area banks faced uncertainty about the scale of their exposure to subprime products, prompting a sudden stop in the availability of money market funding for many financial institutions and a systemic rush to cash.