In response to the 2008–2009 crisis, faced with distressed financial intermediaries, the European Central Bank (ECB) embarked in longer term refinancing operations (LTROs) with full allotment. Using an estimated DSGE model with a frictional banking sector, we find that such liquidity injections have played a key role in averting a major credit crunch. A counterfactual analysis suggests that, absent these nonconventional measures, output, consumption, investment, and the GDP deflator would have been 2.5%, 0.5%, 9.7%, and 0.5% lower on average over 2009, respectively.