Nonetheless, I would hazard the view that prudent risk management suggests that policy will likely need to begin normalization before it is obvious that it is necessary, possibly with greater force than is customary, and taking proper account of the policies being instituted by other authorities. Allow me to elaborate on each of these three items.
This meant the sector as a whole entered 2022 with a strong capital base.7 The current outlook however is challenging for all financial market participants. The Russian invasion of Ukraine has clouded the outlook significantly. While the Russian war is first and foremost a humanitarian tragedy, its economic consequences are being felt across Europe through negative sentiment effects, greater uncertainty and higher inflation.