Since the global financial crisis of 2008, a combination of adverse structural and cyclical factors jointly contributed to the rapid erosion of central banks’ conventional policy space (Chart 5). Chart 5 Central bank policy rates (%)  Source: BIS. Note: The policy rate for the euro area refers to the main refinancing operation (MRO).
As a result, central banks were forced to expand the set of instruments used to achieve their mandates. In the euro area, there is broad agreement among experts that asset purchases, targeted longer-term refinancing operations, forward guidance and negative rates were necessary to shelter the economy from the otherwise devastating consequences that years of subdued demand would have meant for employment, wages and prices.