Original scientific paper
Autor: dr Dragan Momirović
JEL: E40, E50, E60
doi: 10.5937/bankarstvo1406058M

Summary: In the initial phases of the global economic and financial crisis ECB reacted by lowering interest rates to a historic minimum. After the crash of Lehman Brothers and strengthening of financial tensions in the EU and later on the sovereign debt crisis in the euro zone, ECB was forced to search for resource in the non-standard monetary policy measures. The ECB non-standard monetary policy changed the structure and the balance sheet size, and through actions and undertaken measures in the crisis which is still ongoing, strives to conduct the policy of the anticipated long-term interest rate. This paper offers a review of the ECB non-standard policy measures applied and the manner in which monetary policy is spilling over on to the banking and the real sector, but also the effects of the balance sheet expansion on the effects of certain macroeconomic variables. VAR model shows that the effects of the ECB balance sheet expansion are having a positive impact on the macroeconomy effects, i.e. on the two variables, output and prices, and the economic growth. The long-term effects of the non-standard monetary policy implementation remain uncertain and bear the risk of resurrection of undesired financial shocks. The manner in which ECB can avoid the uncertainty of these policies, over a long-term, is to start with gradual “narrowing down of the non-standard policy”, i.e. to create prerequisite for an exit strategy.

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