So the situation needs close attention and the risks must be carefully monitored. But in my view, the path towards a more healthy and sustainable sector involves a clear division of responsibilities. Monetary policy will continue its accommodative stance until inflation returns to our aim, which will remove some of the cyclical drivers of weak profitability linked to disappointing nominal growth.
Before the crisis, only three German government bond contracts on Eurex were reasonably liquid and the bellwether 10 year Bund contract saw trading of around one million contracts a day. Today, daily trading volumes in that contract have fallen to around 600,000, while around 100,000 10 year BTP contracts and 80,000 10 year OAT contracts trade every day.