I have always taken it to be a bedrock principle that when the stability or very functioning of financial markets is threatened, as during the October 1987 stock market crash or the September 11 terrorist attacks, that the Federal Reserve would take a leadership role in protecting the integrity of the system.
The contribution of monetary policy to economic welfare and stability Having explained the more specific and current reasons for the ECB’s recent monetary policy moves, let me now put them in a broader perspective.