ecb speech, 2006-05-11
This reasoning, however, neglects the fact that the observed convergence in government bond yield spreads mainly reflected the closer coordination of monetary policies across euro area countries - an overall compression of risk premia also observable in other markets and outside the euro area - and the ensuing convergence of inflation expectations across countries, as well as the progressive elimination of uncertainty regarding exchange rate movements and, finally, the disappearance of intraeuro area exchange rate risk by the time the euro was introduced.
Sentiment: neutral
Topic: financial_stability