These notions are confirmed by empirical work at the BIS, 1 among others, that have shown that “asset managers in EME asset markets tend to behave in a correlated manner and that investment flows to asset managers and asset prices amplify each other’s fluctuations”. This is why my second message for the industry is this: Do not be oblivious to financial stability issues.
Looking ahead, the medium-term outlook for economic activity remains favourable and the conditions are in place for the euro area economy to continue to grow at a sustained rate. As regards the external environment, global economic growth remains robust, while domestic demand in the euro area is also expected to maintain its relatively strong momentum.