The way forward after the crisis — achieving development through structural reforms in the EU financial markets

Abstract

The hard times EU economy is experiencing in the moment soon will inevitable come to its end. Looking ahead, under the assumption of a gradual modest recovery and the absence of the materialisation of major risks, financial market conditions are expected to improve further. In particular, liquidity and funding constraints for banks should continue to ease and risk premia in financial markets should decline further. Lending volumes should eventually turnaround and start to rise, though remaining at modest levels. This will stimulate the economy as a whole and will introduce conditions for stabilizing the financial market and encourage households and corporate to drive successfully the EU towards a well-functioning post-crisis environment.