The debate on the situation of euro-zone banks and monetary policy

A growing number of economists and , of course , bank directors are concerned about the effect of the ECB’s zero or negative interest rate policy on the situation of banks in the euro zone. The ECB’s stance on this issue does not seem clear, as conflicting views have been voiced . The question is therefore whether the low interest rates are weakening euro-zone banks, whether this weakening may have led to a contraction in credit supply and in growth, and, lastly, what the solutions may be to banks’ low profitability problem.