As the recent global crisis also demonstrated, stable retail sources of funding as against reliance on borrowed funds can greatly enhance the soundness and resilience of financial institutions and can reduce volatility in earnings. Low income savers and borrowers tend to maintain steady financial behaviour through the business cycle both in terms of deposit keeping and borrowing.
Global growth remains solid, providing a favourable environment for euro area exports. On the domestic side, investment is expected to continue to be supported by very favourable financing conditions, improved profits and greater business efficiency. Consumption growth should develop in line with real disposable income growth. However, at the same time, persistently high oil prices in particular pose downside risks to growth.