This results, for example, in nominal dynamics which are difficult to characterize ex ante as temporary or permanent, but which in certain circumstances might lead to diverging paths. In addition, despite its intensity, the recovery of financial intermediation is still incipient and term structure duration is short.
This work has been strongly supported by the Eurosystem, notably via the ESCB Banking Supervision Committee’s annual report on EU banking sector stability and the biannual ECB Financial Stability Review of the euro area financial system.