on june 13, 2017 ( pdf ). 4 the survey is available on the board ’ s website at www. federalreserve. gov / data / sfos / files / senior - financial - officer - survey - 201809. pdf. 5 see randal k. quarles ( 2018 ), “ liquidity regulation and the size of the fed ’ s balance sheet, ” speech delivered at “ currencies, capital, and central bank balances : a policy conference, ” a hoover institution monetary policy conference, stanford university, stanford, calif., may 4. 6 see board of governors of the federal reserve system ( 2019 ), “ minutes of the federal open market committee, january 29 – 30, 2019, ” press release, february 20. 3 / 3 bis central bankers'speeches

estimated for the qe that took place in the united states and the united kingdom. 9 but the lingering effects of the sovereign debt crisis dented the capacity of this stimulus to counter the new disinflationary trend. the delayed bank deleveraging process in the euro area began to accelerate, with banks further shrinking their balance sheets and paying back central bank loans. bank balance sheets declined by around 20 percentage points of gdp in 2013 alone and, at the end of 2013, credit growth to the private sector was contracting at a rate of 2. 4 % relative to a year earlier. on the demand side, risk appetite in the private sector collapsed, with investment subtracting 1. 6 percentage points from gdp growth in 2012. the ecb therefore reacted again in 2013 by cutting its main refinancing rate twice, from 0. 75 % to 0. 25 %, and by seizing the opportunity of the launch of european banking supervision. we carried out a comprehensive assessment of bank balance sheets, with the aim of steering the process of balance sheet repair towards a positive macroeconomic outcome. banks strengthened their balance sheets by over €200 billion in advance of the outcome. 10 that put the banking sector in a much stronger position to transmit our policy. but at this point, the euro area economy was hit by a further downward shock to inflation in the form of a 60 % collapse in oil prices in mid - 2014, which pushed inflation into negative territory. with underlying inflation already weakening, inflation expectations began to be affected. as the 3 / 8 bis central bankers'speeches scope for further interest rate cuts was now limited, it became increasingly clear that our reaction function needed to evolve to address these new challenges. indeed, since our policy framework had never been systematically tested by persistent disinflationary risks, the ecb had not yet had a chance to demonstrate its intolerance for inflation remaining below its aim for protracted periods of time. at the same time, there appeared to be some uncertainty about which tools we would be able to deploy if the effective lower bound were reached. unlike in other major economies, the ecb had not resorted to large - scale asset purchases during the global financial crisis and its aftermath. some even questioned the legality of asset purchases in europe and their effectiveness in our bank - based economy. if these uncertainties were not removed, there was a material risk that falling inflation could become self - fulfilling : the public could begin expecting a smaller monetary policy response to