Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may ABSTRACTThis paper aims to make two contributions: to review the ECB's non-standard monetary policy measures in response to the financial and sovereign debt crisis against the background of the institutional framework and financial structure of the euro area; and to interpret this response from a flow-of-funds perspective. The paper highlights how the rationale behind the ECB's nonstandard measures differs from that underlying quantitative easing policies. As a complement to rather than a substitute for standard interest rate decisions, the non-standard measures are aimed at supporting the effective transmission of monetary policy to the economy rather than at delivering additional direct monetary stimulus. The flow-of-funds analysis proposes an interpretation of central banks' crisis responses as fulfilling their traditional role as lender of last resort to the banking system and, more broadly, reflecting their capacity to act as the "ultimate sector" that can take on leverage when other sectors are under pressure to deleverage. It also provides examples that trace the impact of non-standard measures across different sectors and markets. Keywords:Monetary policy, asset purchases, financial structure, economic and monetary union, sovereign debt crisis, flow of funds JEL: E02, E40, E50, E582 NON-TECHNICAL SUMMARYThe institutional set-up of Economic and Monetary Union (EMU) and the financial structure of the euro area economy -where financing is mostly bank-based rather than market-based -both frame the ECB's monetary policy. It is particularly important to recognise this specific backdrop when making comparisons of the ECB's response to the crisis with that of other central banks.The existence of a single currency in a multi-country area can be seen to create disincentives for individual governments to properly tackle fiscal and structural policies as well as to safeguard financial stability. The crisis has shown that the original institutional set-up of EMU only partially corrected for such disincentives. Excessive debt and leverage had built up prior to the crisis, in private and public, financial and non-financial sectors, with imbalances emerging across the euro area and elsewhere.The global financial and economic crisis has put the spotlight on central banks using their balance sheets as backstops to the financial system. Against this background the paper reviews the ECB's specific non-standard monetary policy ...

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This Working Paper should not be reported as representing the views of the European Central Bank (ECB). The views expressed are those of the authors and do not necessarily reflect those of the ECB.

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