"This 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 ECB's non-standard measures are motivated differently from quantitative easing policies. As a complement to standard interest rate decisions, rather than a substitute, they aim at supporting their effective transmission to the economy rather than at delivering additional monetary stimulus directly. The flow-of-funds analysis proposes an interpretation of central banks' crisis response as 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 for tracing the impact of non-standard measures across different sectors and markets."

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