And although loans granted between domestic MFIs still account for more than 50% of the total EU MFI loans, the respective euro area cross-border activity has increased from only 15% at the end of 1997 to around 23% at present.
In previous remarks, I advanced the notion that liquidity can be thought of as roughly comparable to investor confidence. 5 Liquidity exists when investors are confident and willing to assume risks. And liquidity persists when risks are quantifiable and investors are creditworthy.