After the announcement of our new strategy and forward guidance, the risk distribution around the future evolution of the 3-month Euribor has been truncated from the top, meaning that investors have effectively priced out contingencies that foreshadow a very steep increase in policy rates (Slide 10).
Today, I want to trace history a little bit in an attempt to find out what can be learned from the so-called Lost Two Decades in Japan. The ordeal that Japan’s economy has undergone since the bursting of the asset bubbles in the early 1990s was initially dismissed as a uniquely Japanese experience with limited implication for the rest of the world.