In particular, efficient capital markets are much better suited than commercial banks to provide long term finance to the corporate and public sectors. The capital market is also better placed to accommodate the needs of investors – both institutional and personal – who require long term assets and have a higher appetite for risk than is typical among depositors in commercial banks.
We at the Bundesbank believe that our proven monetary targeting strategy is appropriate in principle for the euro area, too. At all events, studies suggest that the demand for money in the euro area is actually likely to be even more stable than that in national markets.