Actual and prospective increases in short-term interest rates will be reflected in turn in longer-term interest rates and in financial conditions more generally. 8 The Federal Reserve has also been developing a number of additional tools it will be able to use to reduce the large quantity of reserves held by the banking system.
In response to the COVID-19 crisis, such Europeanisation has reached its peak in common debt issuance. Such crisis measures are justified by the pandemic, but they should not be taken beyond crisis times without parallel deepening of the institutional functioning of democracy at the Union level.