Hence a durable improvement in the prospects of the euro area banking system requires further efforts outside the realm of monetary policy. These include, notably, the swift and thorough completion of banking union. Additional adjustment in the banking sector towards greater cost efficiency and business models that remain viable in the new regulatory and macroeconomic environment is also needed.
Production is on an uptrend with some fluctuations, partly due to the completion of inventory adjustment in IT-related sectors. Business fixed investment is growing steadily in a wide range of industries, as corporate profits remain high and business sentiment has been showing a gradual improvement.