However, the manifestation of excessive financialisation may not be confined to finance, and may extend to commodity markets, corporates and households. The financialisation of commodity markets happens both by virtue of deregulation of trade in commodity market exchanges and by virtue of the excessive liquidity that happens to be readily available.
Given the difficulties and uncertainties in measuring the “fundamental” value of an asset and the generally inconclusive results provided by the various asset price valuation models, the report does not endeavour to determine the “appropriateness” of asset price levels. Rather, its main objective is to assess the resilience of the EU banking sector to possible downward developments in asset prices.