The mood swing has been so strong, that some fears have been expressed about financial markets being too optimistic, causing mispricing in some asset classes. Concern of asset price bubbles fed by credit booms are starting to appear in some economies. A word of caution is in order though. Substantial vulnerabilities and downside risks still persist.
In my view, therefore inside the Euro area the gradual pace of adjustment of the monetary policy stance, of the overall provision of liquidity and of its allotment modes can continue. The Euro: sound track record in the first decade In a longer perspective the performance of the currency union is far more flattering.