You mentioned that, in its most recent decision, the Governing Council also responded to the deteriorated credit conditions. What is the reason for the steep rise in capital market rates? One factor is the changing monetary policy in the United States. At the same time, the developments in the money market reveal fears about a withdrawal of the excessive liquidity in the market.
After all, banks in the euro area are gradually repaying their funds1 But that is surely a good sign. Yes, that indicates a return to normal conditions. On the one hand, banks can find funding more easily because savers and enterprises are again depositing more of their money at banks.