``My impression is that the recent stabilization is owed to a large extent to various central bank actions, primarily by the European Central Bank (ECB), that eased immediate liquidity pressures from the banking system late last year. Though many observers seem to be under the impression that the ECB has not yet "stepped in," this is really only true in the sense that the ECB has limited its direct purchases of distressed European debt. More broadly, the ECB now has a larger balance sheet - relative to European GDP - than the Federal Reserve has relative to US GDP. We aren't convinced that the ECB or the Federal Reserve can get themselves back out.''

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