However, the full transmission of this now extended shock to the economy and financial system will take time, as the balance between the impact of near-term policy supports and the depth of the implications of this shock for households, businesses and the financial system plays out. We remain in a position where liquidity challenges have not, as yet, resulted in widespread solvency challenges.
Only then can we avoid national bias in the regulatory and supervisory treatment of banks; only then can we improve risk-sharing in the euro area; only then can we ensure a level playing field where the general principle of “same business, same risks, same rules” applies; and only then can we guarantee a proper transmission of monetary policy.