However, in the euro area, too, interest-based as well as money and credit-based indicators have signalled a long phase of expansionary monetary policy. Boom-bust cycles in the financial markets cannot form independently of monetary policy. According to empirical results, low long-term interest rates tend to increase the risk appetite of financial market participants and thus contribute to a dynamic worldwide growth in aggregate credit.
Six or seven months later, even most of the optimists are a little surprised, I suspect, at the economy’s performance. So the title of this conference is particularly apt. But the issue before us now is not, in fact, how to get onto the road to recovery: we are already on it.