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ALONE among its peers, the European Central Bank (ECB) has resisted quantitative easing (QE). That policy-creating money to buy financial assets-has been used at varying times by the central banks of America, Britain and Japan to fight deflation and stimulate economies flattened by the financial crisis of 2008. Yet the ECB still shuns QE, treating it as a weapon of last resort, even though the euro zone is suffering from “lowflation”?

One reason to doubt the efficacy of QE in the euro area is that banks rather than markets dominate the provision of credit there. In America, in contrast, companies raise much of their funding in the bond markets. One of the main ways that QE has boosted the American economy is by lowering corporate borrowing costs. As the Federal Reserve bought Treasuries and government-guaranteed mortgage securities, pushing down their yields, investors turned to corporate bonds, in turn driving down their yields. This effect would necessarily be feebler in the euro zone.

This suggests that the ECB should work through the banks in fighting lowflation. It is striving to do that in two main ways. In June it brought its main lending rate down to a new low of just 0.15% and became the first big central bank to introduce negative interest rates, which in effect charge banks that leave deposits with the ECB. This has helped lower money-market rates in the euro zone almost to zero-and cap the appreciation of the euro, which was contributing to disinflationary pressures.

As well as this general stimulus to the euro zone, the ECB is also seeking to galvanise the recovery in southern Europe, where small firms in particular remain starved of credit. Mimicking a policy invented by the Bank of England-the funding-for-lending scheme-the ECB will make funds available at dirt-cheap rates to banks until 2018 as long as they do better in lending to the private sector (excluding household mortgages).

The new funding operations, starting in September, will take time to work their way through to the economy, but the ECB is prepared to be patient. It has always insisted on a long horizon for meeting its inflation target. It points to inflation expectations, gauged both through the financial markets and the views of professional forecasters. These suggest that inflation, despite its recent lows, will eventually return to the target of just under 2% and thus remains “anchored”.

Even if these forecasts are correct, however, the euro zone stands out among big economies for the depth and likely duration of its bout of low inflation. Lowflation is already hurting debtors in the euro area since their incomes are rising more slowly than they expected when they borrowed. Their plight would intensify if lowflation mutated to deflation. The real burden of debt rises when prices are falling. That effect would be especially pernicious in the euro area as levels of private and public debt are perilously high in many countries.