Inflection Point
by AIB Treasury Economic Research Unit
- The stresses that have emerged in parts of the global banking system, and the associated volatility this has generated on financial markets are weighing on central bank’s monetary policy decisions.
- Meantime, we have already seen a tightening of financial market conditions and lending standards for loans in the past year
- ECB President Lagarde has also warned that the tensions seen over the past couple of weeks are not trivial and will not be without repercussions
- The rapid withdrawal over the past year of the very loose monetary conditions in place for the previous decade was always likely to cause problems in parts of the financial system
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