Given the experience of the past year, I believe that indirect supervision, as is being carried out by the ECB, can be of great benefit – to banks, to their customers, to the stability of national financial centres and to the real economy. But I will come back to that later too. Now, going back to finding a name for the “less significant” institutions.
In that context I find it striking that markets have shifted their expected path of euro area inflation further out in time and now expect headline inflation to peak only in 2023Q1. On top of that, I see several upside risks to inflation.