Alternatively, these banks could concentrate on strengthening their distribution capabilities, perhaps through agreements with large-scale asset management institutions that do business in a number of different financial market centres, in order to obtain more sophisticated products and offer their customers a broader range of services. 5.
Certainly, the reasons for these blockages relate in part to demand-side factors, but the supply-side – banks’ capital levels and risk assessments – remains an important part of the story. A malfunctioning credit channel has several unwelcome consequences for the real economy. It impairs the transmission of monetary policy throughout the euro area.