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Quantitative tightening in the euro area

The Sound of Economics

CHAPTER

The Risk of Financial Fragmentation in the Eurozone

In the Eurozone, we also have the problem that as interest rates goes up, you might actually have a transmission mechanism with the quality of lending. How does that complicate the story? No, it's true that this is the most often discussed risk in the Eurozone contrary to what happened in the US or in the UK. But I think for the moment, it's under control in the Euro zone. And thanks to the announcements that the ECB made last summer when they created this transmission protection instrument.

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