My brief discussion has most certainly not fully captured all the details and the complexity of the CL Financial crisis. But even this brief overview provides some valuable lessons for shaping our future financial system.
The € forward rate ten years out is around 240 basis points above its pre-pandemic level, without policy rates having yet moved. One-year forward real rates, one-year ahead and five-year forward real rates, five-years ahead are around 100 and 140 basis points higher, respectively. Beyond September, the Governing Council has agreed that a “gradual but sustained” path of further rate increases will be appropriate.