Capital markets are dynamic; they are innovative and they permanently create new instruments that increase flexibility in terms of finance. In flexible financial markets, however, monetary impulses should be passed through at a faster rather than a slower pace. Disintermediation in corporate finance coincides with the institutionalisation of savings. Private households shift funds from bank accounts into pension funds and mutual fund shares.
Share ownership – direct and indirect – is on the increase. As the value of equities tends to be more volatile than that of other financial assets, changes in financial wealth may impinge on consumption decisions with greater frequency. However, the wealth effect for the euro area is considered to be rather small.