Banks and savings banks would be unwise to escape from structural change by fleeing into risk. And the longer the low-interest-rate environment persists, the greater the risk of institutions taking on excessive risk. After years of de-risking, we are now seeing the first signs in Germany of a growing willingness to assume risk.
Governments should take advantage of the increasingly solid and broad-based recovery to rebuild their fiscal buffers in line with the Stability and Growth Pact (SGP). At the same time measures to increase euro area economies’ productivity should be forcefully pursued.