Thus, the trend of moderating inflation and consolidating growth in the second and third quarters of 2010–11 justified the calibrated policy approach of the Reserve Bank. 8  BIS central bankers’ speeches  Transmission of monetary policy improved significantly during this period as liquidity continued to remain in deficit with significant increase in banks borrowing from the repo window (Chart 9).
When the ESRB was established, the ECB did not have the role of a micro-prudential banking supervisor nor did it have macro-prudential responsibilities in the banking sector. This has changed with the Banking Union and the establishment of the Single Supervisory Mechanism (SSM).