There is also uncertainty about the possibility of feedback effects onto the financial system, including questions about what the ultimate impact on the intermediation of credit – both through financial institutions and markets – will be. Moreover, until conditions in the US housing market show signs of improvement, the possibility of continuing tensions in structured credit markets cannot be excluded.
However, it is positions after the decimal point that will be affected by this, and next year we shall in any case first of all see prices cooling off. Parallel to this, there was another, almost absurd debate about strengthening the peripheral countries by weakening Germany’s competitiveness. This came about from the belief that the peripheral countries are at risk from deflation.