In the euro area, corporate financing mainly relies on bank lending. Shortly after the crisis, it therefore seemed appropriate for the ECB to act directly on credit supply conditions by reducing money market rates and improving bank refinancing conditions.
Having lowered the refi rate to the zero lower bound (0.05% as from 10 September 2014 and cut to 0% on 16 March 2016), the ECB now builds on its balance sheet expansion (€ 3 587.4 billion at 2 December 2016, up from € 1 988.2 billion at 19 September 2014) to stifle any deflationary risks by implementing a large array of unconventional measures of assets repurchases (APP): i) covered bonds and ABS since the fourth quarter of 2014 (CBPP3 et ABSPP); ii) public sector securities since March 2015 (PSPP) and iii) corporate bonds since June 2016 (CSPP).