Ms Schnabel noted that since the Governing Council’s previous monetary policy meeting, the market narrative had shifted back from financial stability concerns to inflation concerns and to potential effects on the economy from the turbulence in the banking sector. Markets seemed so far to have digested the bank failures well, especially in the euro area. Measures of systemic stress, volatility and market liquidity had returned to close to their levels before the failure of Silicon Valley Bank (SVB). Risk assets in the euro area had not only largely recovered the losses experienced following the SVB failure, but in ... (full story)