This type of news, combined with the various actions taken by central banks, has contributed to a recovery in the prices of risky assets. Overall, supervisory information would be an important input into the ECB’s efforts to ensuring an effective implementation of monetary policy. It has proven to be particularly crucial during the turmoil.
In this regard, the full implementation of the Stability and Growth Pact is particularly important at the current juncture. In this same vein, the euro area should implement the reforms needed to reduce the structural rigidities in its labour and goods markets.