Fortunately, several years of rather favourable economic and financial developments, as well as better risk management, have significantly improved the resilience of the euro area banking system, placing the core financial institutions in a rather comfortable position to absorb the recent disturbances. Our baseline scenario is that the process of adjustment in the money and credit markets will take place in an orderly manner.
Nevertheless, it cannot be excluded that this positive baseline scenario could yet be challenged by some low-probability but potentially high impact negative events. Therefore, there is no room for complacency at the present juncture. The first priority remains the need to restore confidence among the various participants of the global credit market.