(a) Bank of England lending operations shown here: Indexed long-term repo, Contingent term repo facility, US dollar repo operations, Liquidity Facility in Euros, Term Funding Scheme and Term Funding Scheme with additional incentives for SMEs. Bank of England asset purchases shown here: Asset Purchase Facility and Covid Corporate Financing Facility. (b) ECB lending operations: Lending to euro-area credit institutions related to monetary policy operations denominated in euro. ECB asset purchases: Securities held for monetary policy and other purposes. (c) Federal Reserve lending operations: Repurchase agreements, Loans and Net portfolio holdings of TALF II LLC. Federal Reserve asset purchases: Securities held outright. Section of chart lying below the zero line from mid-2020 reflects a decline in repo outstanding relative to end-February. Despite their success in the unparalleled circumstances of Covid, these actions provide only limited guidance as to how central banks might best respond to future instances of market dysfunction driven by the more structural trends I outlined at the start of my remarks:  -  They were one-way purchase operations of relatively long-duration assets – so they were not preprogrammed to unwind or self-liquidate when core market functioning returned, as it did by the late spring of 2020. Central banks were ‘buyers of last resort’ more than ‘market makers of last resort’.
Lucas Papademos: The role of the ECB in financial crisis management Speech by Mr Lucas Papademos, Vice-President of the European Central Bank, at the conference on “The cost of the financial crisis: Planning an exit strategy”, organised by the Bank of Greece and the Hellenic Observatory at the London School of Economics and Political Science, Athens, 27 May 2009. * I. *  *  Introduction  “Τα πάντα ρεῖ” (all is in flux) Heraclitus asserted about 2500 years ago. His aphorism is truly relevant to our understanding and assessment of the financial and economic developments over the past two years. The financial crisis has evolved over time, and so have the policies employed to counteract its impact as well as the public debate about its causes and consequences. A year ago, gatherings such as this one would have been dedicated to identifying the underlying sources and the other contributing factors of the turmoil in financial markets. Six months ago, as the crisis deepened and broadened after the collapse of Lehman Brothers, public policies and discussions concentrated on how to restore confidence in the banking system and deal with the significant weakening of economic activity worldwide. More recently, the attention has progressively focused on the new economic and financial landscape that is likely to emerge after the crisis, and on devising “exit strategies” from the extraordinary policies currently pursued.