2 The benefits of deregulation and innovation appeared particularly pronounced in the exceptionally benign pre-crisis macroeconomic environment, which became known as the “Great Moderation”. On the other hand, and with the benefit of hindsight, we can say that the Great Moderation was the calm before the storm.
Notwithstanding the tightening of credit standards reported in the bank lending survey for the euro area, continued strong loan growth to non-financial corporations suggests that the supply of bank credit to firms in the euro area has not been significantly impaired by the financial turmoil thus far.