Hence, we will witness temporarily high inflation rates for a more protracted period than previously anticipated, though rates will eventually decline towards 2%. What does such an outlook mean for the Eurosystem’s monetary policy stance?
Now that weaker housing markets and deteriorating economic conditions have, in fact, impaired the quality of CRE loans at many banking organizations, we are monitoring carefully the effect that declining collateral values may have on CRE exposures and assessing the extent to which banking organizations have been complying with the CRE guidance.