I expect that we are going to remain here for quite some time given the structural factors at work, although it does remain possible that a re-acceleration of growth in economies with little spare capacity could see inflation re-emerge. One consequence of interest rates being lower for longer is that asset prices have increased as investors discount future returns by less.
As most European countries do not have much experience with winding down banks,  BIS central bankers’ speeches  5  there may be a tendency to avoid putting banks into resolution – by practising supervisory forbearance and allowing banks ever more time to restore viability. The ECB as supervisor has an important role to play here in ensuring that this does not happen.