The resulting containment of re-denomination risk in the Euro area and the wider improvement in market sentiment that followed helped re-establish a basis for better functioning of private markets. As a result, the need for central bank intermediation of intra-Euro area cross-border financial flows diminished.
But just as importantly, that was also the year when the ECB's balance sheet had peaked shortly after the first 3-year Longer-Term Refinancing Operation (LTRO) was conducted...
... and whose runoff resulted in a major shrinkage in the ECB's balance sheet, ultimately forcing Mario Draghi to launch QE as yields blew out.
Fast forward to today, when it is "deja vu" all over again for the ECB's T(argeted)-LTRO.
But first, some background: At his press conference following the October 25 Governing Council meeting, ECB President Mario Draghi mentioned that "the TLTRO was raised by two speakers ... but not in any detail". And subsequently in a speech given in Paris, Banque de France Governor François Villeroy de Galhau remarked that "the question of TLTROs will need to be considered".