At the same time, banks are increasingly cautious and selective about lending to their peers – to the detriment to the operation of the interbank markets. Banks prefer dealing with the Central Banks instead. In short, liquidity preference has again started to dominate the markets.
As I said, Europe in general and the euro area in particular has become the centre of attention of the financial markets. This is not so because of the average condition of the European economy: indeed, judging by several objective criteria, Europe is not worse off economically than the other comparable economic areas.