This is in line with the provisions in the Treaty, which gives the ESCB the competence, without prejudice to the primary objective of price stability and to the ECB independence, to support the general policies of the European Union and notably to contribute to the smooth conduct of policies pursued by the competent authorities relating to the stability of the financial system.4 Most central banks have performed such a role as financial lender of last resort to the banking sector in history when severe crises struck.5 Nevertheless, the second fundamental issue comes to the fore, raising the question about the possible risk that the non-standard monetary policy measures may produce unintended consequences for the monetary policy stance.
This concern has been in the mind of the Governing Council from the outset of the crisis. It has led to the adoption of a clear guiding principle in the implementation of non-standard measures: the separation principle. The separation principle is the acknowledgement that standard and non-standard monetary policy instruments have different purposes.