For example, due to financial turmoil in 2008, Danmarks Nationalbank decided to increase the size of its foreign-exchange reserves in order to signal its commitment to the fixed-exchange-rate policy. Rising asset valuations in light of easy financial conditions Let me now move on to the effects of exceptionally supportive monetary policy on financial markets.
In the current environment of easy financial conditions, asset valuations and leverage have risen. Asset price in-  Page 5 of 9  creases may reflect improved macroeconomic prospects, but also a search for yield. This has compressed spreads on high-yield debt and reduced risk premia.