As a result, it appears more likely that much of the decline in the neutral rate is likely to prove persistent, consistent with a variety of estimates.7 One likely explanation for this persistence is the sharp drop-off in potential output growth since the Great Recession.
During the course of 2009 Greek banks issued € bn of unsecured debt with a 2–3 years maturity in the capital markets. They also issued € bn of covered bonds. Banks’ funding plans for 2010 take into account that the liquidity to be provided by the ECB will eventually return to its pre-crisis level. Thus, banks are now re-oriented to the capital markets.