Both monetary and credit growth continue to be supported by the historically low level of interest rates in the euro area and may also reflect the improvement in the economic environment over the last few quarters. Given the continued strength of monetary growth, liquidity conditions remain ample in the euro area.
In particular, financial institutions should be allowed to fail without imposing unacceptable costs on the rest of society. Tonight, I shall reflect on the recent developments in European macroprudential supervision and try to clarify our understanding of what European macroprudential policy is and what it is not, and what it can achieve and what it cannot.