Từ sau đó trở đi, nền kinh tế EU bước vào suy thoái mạnh nhất được ghi nhận kể từ những năm 1930. Truyền của khủng hoảng tài chính cho nền kinh tế thực sự phát triển ở tốc độ kỷ lục, với sự kiềm chế tín dụng và sự tự tin võng đánh đầu tư kinh doanh và nhu cầu của hộ gia đình, | European Commission Economic Crisis in Europe Causes Consequences and Responses interest rates to historical lows so as to contain funding cost of banks. They also provided additional liquidity against collateral in order to ensure that financial institutions do not need to resort to fire sales. These measures which have resulted in a massive expansion of central banks balance sheets have been largely successful as three-months interbank spreads came down from their highs in the autumn of 2008. However bank lending to the non-financial corporate sector continued to taper off Graph . Credit stocks have so far not contracted but this may merely reflect that corporate borrowers have been forced to maximise the use of existing bank credit lines as their access to capital markets was virtually cut off risk spreads on corporate bonds have soared see Graph . Graph Bank lending to private economy in the euro area 2000-09 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source European Central Bank Governments soon discovered that the provision of liquidity while essential was not sufficient to restore a normal functioning of the banking system since there was also a deeper problem of potential insolvency associated with undercapitalisation. The write-downs of banks are estimated to be over 300 billion US dollars in the United Kingdom over 10 of GDP and in the range of over EUR 500 to 800 billion up to 10 of GDP in the euro area see Box . In October 2008 in Washington and Paris major countries agreed to put in place financial programmes to ensure capital losses of banks would be counteracted. Governments initially proceeded to provide new capital or guarantees on toxic assets. Subsequently the focus shifted to asset relief with toxic assets exchanged for cash or safe assets such as government bonds. The price of the toxic assets was generally fixed between the fire sales price and the price at maturity to give institutions incentives to sell to the
