the interbank market emerged in the euro area and elsewhere in august 2007, the ecb reacted swiftly by providing de facto unlimited overnight liquidity to limit euro area banks ’ liquidity risk. as the tensions morphed into a large - scale crisis of confidence in october 2008, the ecb responded with a mix of standard and non - standard monetary policy actions to foster financing conditions and enhance its credit support to the euro area economy, all with a view to maintaining price stability. the standard measures essentially entailed a steep reduction of the main refinancing rate to a historical low of 1 % over a seven - month period ( october 2008 – may 2009 ). this was done in reaction to the weak economic environment and the associated change in the inflation outlook. the non - standard measures included granting banks unlimited access to central bank liquidity against an extended range of collateral with the possibility for banks to borrow liquidity at a broader spectrum of maturities, of up to 12 months. the ecb also intervened directly in some market segments that were dysfunctional, namely the covered bonds market. this was deemed important for the long - term financing of banks. in may 2010 the financial crisis took a different direction ; markets started to question the sustainability of public finances in parts of the euro area. in response, the ecb intervened in some debt securities markets, in order to prevent large and important segments of the securitised credit market seizing up and obstructing monetary policy transmission. these interventions have been limited in size, and their impact on liquidity creation has been fully sterilised. overall, the non - standard measures have been adopted with a view to ensuring the transmission of low policy rates to the euro area economy. they have been tailored to the specific financial structure of the euro area economy, whose financing to a large extent relies on banks. these measures are fully in line with the ecb ’ s price stability objective. in this regard, the approach chosen by the ecb and the eurosystem differs from that of other major central banks which embarked on large - scale unconventional measures to replace, rather than complement, standard actions, after those standard actions – changes in the policy interest rate – had reached their lower limit. in this respect, the ecb ’ s non - standard response does not qualify as a form of quantitative easing or credit easing. non - standard monetary policy measures are an extraordinary response to exceptional circumstances. they are, by construction, temporary in nature. looking

, via hysteresis, structural unemployment. but it also reflects weak underlying trends in productivity growth and labour supply. consequently, while some of the bartelsman, e., f. di mauro and e. dorrucci ( 2015 ), “ eurozone rebalancing : are we on the right track for growth? insights from the compnet micro - based data. ” www. voxeu. org. draghi, m. “ stability and prosperity in monetary union. ” speech at the university of helsinki, 27 november 2014. see also keynote address at the suddeutsche zeitung fuhrungstreffen wirtschaft, november 2013. banco de espana ( 2013 ), “ variation in the cyclical sensitivity of spanish inflation : an initial approximation. ” economic bulletin, july – august 2013. riggi, m., and f. venditti ( 2014 ), “ surprise! euro area inflation has fallen. ” banca d ’ italia occasional papers no. 237, september 2014. european commission, winter 2015 projections ; imf, april 2015 weo ; oecd, november 2014 economic outlook. bis central bankers ’ speeches effects of the crisis on investment and employment are expected to unwind, potential growth is projected to remain well below pre - crisis growth rates. this is problematic for at least three reasons. first, it would mean that the output gap would close at a notably lower level of output, at which point monetary policy would have to return to a more neutral stance ( chart 4 ). a significant share of the economic losses suffered across countries would therefore become permanent. structural unemployment would stay around 10 %. youth unemployment would also remain elevated, with devastating effects for individuals in terms of labour market “ scarring ”. 8 and this would ultimately affect society as a whole as, given our demographics, realising the potential of the young and their capacity for innovation is essential for long - term sustainability. second, a situation of persistently low potential growth would make it even harder to work through the debt overhang that still exists in parts of the euro area. for firms that took on debt based on pre - crisis growth expectations, low potential growth acts as a major barrier to new investment, as any profits generated will likely be absorbed by servicing existing debt. and we do see signs that this effect has been operative in euro area : there is a clear negative correlation between corporate debt - to - gdp levels in different countries at the beginning of