fell below 1 %, in the second half of 2013, and kept drifting down over the first semester of 2014. these developments were also accompanied by a significant decline in various measures of long - term inflation expectations. during the same period, economic growth was faltering reflecting a general lack of demand in the euro area with corresponding high unemployment. a more expansionary monetary policy stance was needed to maintain price stability in the face of insufficient aggregate demand and downward inflationary pressures. in response to these developments, the governing council of the ecb in june and september 2014 cut the monetary policy rate, decided on a negative deposit facility rate ; introduced two asset purchase programmes, for asset backed securities ( abs ) and covered see http : / / www. ecb. europa. eu / pub / fsr / html / index. en. html. bis central bankers ’ speeches bonds, and launched a new liquidity facility to provide longer - term funding to banks conditional on their credit performance ( tltros ). the relatively weak use of the first tranches of the tltro by the banks and the fact that inflation turned negative in december, led the ecb to enlarge the asset purchase programme ( app ) by including sovereign bonds and by deciding to calibrate a monthly amount of €60 billion purchases of the three types of assets. the switch to a more active steering of the ecb balance sheet is the distinguishing feature of the new phase of our non - standard measures. it is important to underline the nature of this new phase. we are not thinking of increasing our monetary base, expecting that through the workings of a stable multiplier, monetary aggregates will increase, thereby causing an upward movement in inflation, by whatever ways the traditional quantitative approach conceived. we decided on a large scale asset purchase ( lsap ) mostly to be able to use several new channels of transmission of an expansionary monetary policy. the increase of the monetary base and the total balance sheet is a consequence of these new types of monetary stimulus. by purchasing this type of long - maturity assets, we intervene directly on medium - term rates, we extract duration from the market, we provide liquidity directly to non - bank entities, and we open space in banks ’ balance sheets for increasing credit. also, by reducing persistent market spreads, in abss for instance, we encourage banks to increase their supply. as new money origination can only be achieved through the creation of more loans, this measure has the

a staff team from pdr, res and whd, approved by mark allen and michael deppler ( 29 june ). post adjustment even harsher. that is the experience of the gold standard, the last world currency. in sum, a new world monetary order – that is, a framework for payments between residents of different countries which ensures smooth trading in goods, services and financial assets – requires a mechanism to keep imbalances in check. key elements of such a mechanism include a prominent role for the imf in two essential areas : strong and effective surveillance in crisis prevention, and responsible lending, with appropriate limits and conditionality, to countries in need. this was the consensus prevailing until just before this crisis. there is a risk that the short - term objectives pursued to resolve the current crisis will change this consensus. a new monetary order must first and foremost aim to prevent crises, not to postpone them.