To ensure the effective transmission of monetary policy we provide forward guidance and provide ample liquidity. But we can only provide an environment conducive to long-term growth. Growth itself comes from a structurally sound economy. The banking union and the forthcoming asset quality review are part of structural reforms whose success is key for the economic future of Europe.
In some cases, firms may be practicing good credit risk management on an exposure-by-exposure basis, but they may not be paying close enough attention to aggregation of exposures across the entire organization. Practicing good portfolio credit risk management is not easy. Institutions often encounter challenges in aggregating exposures and identifying and measuring credit concentrations within the entire portfolio.