The ECB’s performance during the crisis

a column by Ashoka Mody and Milan Nedeljkovic for VOX: CEPR’s Policy Portal

The ECB’s actions in the wake of the Global Crisis have been described as hesitant, relative to other central banks.

Based on analysis of financial markets' response to the ECB's interventions during the euro crisis, this column argues that central bank interventions are effective if they clearly signal a commitment to reinvigorating the economy and if they address the source rather than the symptom of financial stress.

The ECB did not follow these principles, limiting its ability to improve financial market sentiment.

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