Increasing market uncertainty over the condition of banks in early 2016 was not due solely to concerns about global economic growth but also above all reflected concerns about banks’ non-performing loans and declining profitability amid low interest rates and subdued growth.
In many countries, a rapid rise in debt has led to financial sector problems and a pronounced slowdown in economic growth. In China, too, sustainable management of the public finances would require a slowdown in the pace of debt accumulation.
The cover and transparency of China’s GDP statistics need to be improved. According to the statistics, the deceleration in growth has been very evenly spread, which has increased suspicions over the reliability of the data.
The ECB Governing Council decided in March 2016 on a package of measures to achieve the price stability objective. The monetary policy measures and forward guidance together provide a comprehensive package.