Introduction

Monetary policy transmission involves the adjustment of financial and real variables following a change in the policy-related short-term interest rate. Most the chapters in this volume analyse these adjustments, evaluating their relevance and measuring their economic importance. Economic and financial structures are potentially relevant factors in shaping monetary policy transmission. Accordingly, this chapter presents a set of stylised facts on the euro area. An extensive or complete account of the euro area's structural features is, however, beyond our scope here; we will concentrate only on the aspects that we believe are most important for the findings of this volume.

The information is summarised in five tables, structured in a way that facilitates cross-country comparisons both within the euro area and, whenever available, with two other large world economies, Japan and the USA. Table 26.1 (p. 434) presents information on macroeconomic characteristics, the relative importance of markets and financial intermediaries. Table 26.3 (p. 438) reports indicators on the banking sectors and table 26.3 (p. 440) shows the balance sheet structures. Finally, the financial structure of the corporate and the household sector are depicted in tables 26.4 and 26.5 (pp. 444 and 447). All these aspects are relevant for the transmission mechanism and the tables give an overview of their relative importance in the euro area, for its member states and for the USA and Japan. The chapter is organised in four sections. Section 1 highlights the major macroeconomic and financial features.