Banks could increase their capital by various means, they could retain earnings, raise equity in the market, or sell some of their assets. Public money should only be used when private solutions are not available or have been exhausted. Whilst it is not yet clear whether these public backstops will need to be tapped, it is essential to have them in place.
In the euro area, instead, in the third quarter of last year (the latest for which we can estimate the decomposition of consumption) demand for both goods and services was still below the pre-pandemic trends. Third, the labour market has been much tighter in the United States than in the euro area.