In Germany, incidentally, the rate since 1999 has been 1.6%. Such results were not matched over a comparable period in the 50-year history of the Deutsche Mark. Confidence in the currency is also reflected in the fact that inflation expectations in the euro area are stable and in line with the ECB’s definition of price stability, i.e.
Constructing correctly calibrated regulatory measures involving bank capital is extremely challenging in the current financial crisis. This is principally because of the negative feedback loop between the banking sector, sovereign debt and the real economy.