While a large share of the voluntary early repayments at the end of last year and early this year was financed out of outstanding excess liquidity, banks have been more recently raising alternative funding to cover maturing TLTRO loans, in particular in light of the large amount which matured in June.
That opens up the way to a higher natural rate of interest, and generally more normal monetary and financial conditions. The title of the previous session was “How to reform Europe”. In the same way as the whole EU, we in the small euro area countries face the need to reform our economies. Monetary policy is common for the whole area.