In the light of these observations, there is no reason to change our strategy. Some economists argue that low rates are contributing to speculative bubbles forming, in particular in the housing market. Are they wrong? 2/4  BIS central bankers' speeches  We monitor financial stability very closely. Our assessment is that there are currently no bubbles at euro area level.
There’s a simple reason for this – financial asset bubbles have historically been associated with an increase in bank credit and the size of banks. Today, the flow of credit to the economy is picking up but remains moderate. What is more, the size of the banking sector is limited by regulation. What about bubbles in unregulated financial institutions in the “shadow banking” sector?