The chart on the right of slide 12 shows that recent debt securities issuance activity by euro area MFIs indicates a slowdown in longterm debt issuance coupled with a rapid rise in short-term debt issuance. Overall, these developments in capital markets have accentuated the pressures towards tighter financing conditions for banks. Finally, in the euro area insurance sector developments have been generally favourable .
Insurance companies had relatively limited exposures to structured credit products associated to US sub-prime mortgages, and, as a result, most of them faced limited writedowns in the second half of 2007, especially when compared to those recorded by many euro area large and complex banking groups (as shown in the chart on the left of slide 13).