In sum, wholesale financial markets of the euro area are currently benefiting strongly from the continued reduction in transaction costs, the development and spreading of new financial products such as Pfandbriefe, and the introduction of a wide set of area-wide and sectoral indices for stock prices and bonds. Looking forward, there are a number of challenges to be met.
But there also appear to be corporates in the euro area that cannot invest in new growth opportunities because of an excessive level of debt. Well-capitalised banks are better able to end or restructure loans to firms with bad credit standing. This in turn ought to facilitate the process of selection of the firms that deserve to survive because they can thrive.