The rapid expansion in cross-border borrowing and lending in the euro area unrelated to Governments was a phenomenon driven as much by global financial liberalisation as by the existence of the euro. It led to a huge accumulation of banking claims.
It implies that, while our bi-monthly monetary policy deliberations have become intensely data-dependent and are likely to remain so with uncertainty and risk high, we will continue to see through the noise and focus on long-run outcomes. This stability in our approach to monetary policy can contribute to better long-term inflation outcomes and therefore a more favourable environment for investment.