This brings us to the territory of political economy, more precisely to the issue of whether the euro fosters or hinders structural reform. Although this issue has received a lot of attention recently in both theoretical and empirical work, my impression is that so far no consensus has emerged.
That said, central banks should aim to improve the current infrastructure for conducting foreign exchange swap arrangements, ensuring that future policy responses face no technical obstacles. The surge in official liquidity is, however, also associated with the launch of non-standard monetary operations in advanced economies. These policies seek to stabilise the domestic economy and have been criticised by emerging markets’ central banks.