One of the reasons that banks in Europe, Japan and the United States were so keen to lend short-term to banks in emerging markets was that the Basle capital weights favoured short-term lending over medium or long-term lending. This is logical from the point of view of an individual bank – there is less risk associated with a short-term loan.
Following a rise of 0.2% in the fourth quarter of 2018, euro area real GDP increased by 0.4%, quarter on quarter, in the first quarter of 2019. Incoming economic data and survey information continue to point to somewhat slower growth in the second and third quarters of this year.