1) The document discusses a model developed by Gerali et al. (2010) and modified by Angelini et al. (2011) to analyze the impact of the financial crisis on the euro area economy and the interaction of monetary and macroprudential policies. 2) It finds that the recession in the euro area in 2009 was almost entirely caused by adverse shocks to the banking sector, and that aggressive monetary policy helped mitigate the negative effects. 3) It also finds that monetary and macroprudential policies should cooperate, as their benefits are largest when the economy faces financial shocks. Macroprudential policy can also effectively lean against financial cycles by containing credit expansion.