In the current situation, we see that risks stemming from excessive risk-taking or any misaligned asset prices are contained in the euro area. This assessment is supported by continued moderate private sector credit expansion and leverage. However, we have certainly noticed that equity prices have continued to rise – albeit from previously low levels – and that sovereign bond yields are historically low.
Moreover, ECB estimates suggest that corporate bond risk premia are moving towards levels seen before the financial crisis. In addition, co-movements in financial markets have increased since summer 2014.