Most advanced countries far exceeded this level prior to the financial crisis – and continue to do so. Thus, the diagnosis for advanced economies like the EU und the US is that increasing financial intermediation is beneficial, but only up to a point. This point has been exceeded in most developed economies. 5. What’s the right medicine?
We will unwind the programme after the pandemic-related downward pressure on the economy is over and the projected path of euro area-wide inflation shifts upward. Given this, the solution to diverging economic and financial outcomes – if that turns out to be the case – lies not in euro area-wide monetary accommodation.