This should of course come with appropriate conditions – private shareholders should absorb the losses from past problems, governments that put in new capital should share in the upside and guarantees that are offered should be priced. Governments should plan to divest their holdings in banks in due course.
In relation to this, there is also a risk of a change in the situation where stable financial conditions are durable and inflationary pressures generally subdued which has been supporting the ongoing global economic expansion. With regard to the second factor, it should be borne in mind that inventory adjustments may be triggered as the economic recovery matures.