The same goes for the imported credit risk that could come along and the question of collateral. These are the areas where we have direct responsibility as a central bank. What is relevant to us is that we protect the functioning of our open market economy.
Bundesbank estimates suggest that the euro is significantly undervalued, at least if long-term historical experience is taken as a criterion.36 A number of other authors have reached similar conclusions.37 Somewhat less recent studies by IMF or OECD staff also find evidence of a significant undervaluation.38 Looking for possible causes for the recent weakness of the euro, it will soon become apparent that the euro’s exchange rate reacted asymmetrically to macroeconomic events on each side of the Atlantic.