Financing is one factor that may hold back R&D in the European digital sector. For instance, intangible investment is difficult to collateralise and therefore harder to finance in a conventional bank-centred financial system like the one prevailing in continental Europe.
Generally, an environment of stable prices reinforces the stability of the financial system as well. This, however, is not always the case. An environment of low interest rates coupled with low inflation may be conducive to asset price bubbles and the build-up of excessive leverage.