The purchases of government bonds are intended not only to raise the rate of inflation, but also to encourage banks, in particular those in southern Europe, to again extend more loans to the corporate sector. Can that work? I have my doubts in that respect. Credit institutions in southern Europe are currently not suffering from a lack of liquidity.
We at the CBB believes that sound insurance markets need to have appropriate regulatory framework, adequate accounting standards and a strong supervisory infrastructure, and proper corporate governance that should be long-term oriented focusing not only on shareholders returns, but also on protecting policyholders.