The first one works through some forms of financing receiving preferential treatment. The second works through protecting incumbents from new competitors. Both channels can be intended or unintended by regulators, and both can ultimately steer an economy towards adopting a financial structure that may look different to the one it would have adopted were market forces left to their own devices.
Some lessons for the future Our monetary policy measures are bearing fruit, and the growth outlook confirms our confidence that inflation will converge towards our aim of below, but close to, 2% over the medium term. Monetary policy alone cannot prevent divergences in a monetary union. Sound economic policies are the key drivers of Europe’s prosperity.