16 In the absence of a central counterparty, the network of counterparty exposures associated with a class of OTC contracts might look something like panel A in figure 3. Each market participant has counterparty risk exposures to one or more other market participants. Although each participant knows its own risk exposure, it is unlikely to have complete information on its counterparties’ exposures to others.
In this context, the Governing Council again stressed the need for the continuation of wage moderation in the euro area. As noted earlier, monetary and credit developments confirm that liquidity in the euro area is ample. Developments in the exchange rate of the euro also remain a cause for concern with regard to future price stability.