However, our estimate of the break-even spread, and hence the profitability of the issue, does not take into account different degrees of subordination across issues. To the extent that that the degree of subordination required by investors is greater than it was previously, the overall profitability of the issue will be lower.
Looking at developments over several months, the underlying pace of monetary expansion, when accounting for special factors, remains subdued. Loan dynamics are also subdued and in many parts of the euro area, credit has been contracting. This is the result of balance sheet adjustments by banks and businesses as well as the current economic weakness. 2.