In this context, financial market participants are hedging against inflation rates above the target, which is reflected in the historically high inflation risk premia. Longterm inflation expectations for the euro area, which are derived from expert surveys by Consensus Economics, are closer to the inflation target of 2%, but still slightly higher.
Third, the envisaged process of consolidation of existing legislation represents an opportunity not only for rationalization but also to promote a truly common set of rules for financial institutions, especially those operating on a cross-border basis.