First, states permitted multibank holding companies to convert subsidiary banks (existing or acquired) into branches. The holding companies could then expand geographically by acquiring banks and converting them into branches of one of their existing bank subsidiaries. Second, states began permitting de novo branching, whereby banks could open new branches anywhere within state borders.
Overall, the underlying strength in the euro area economy continues to support our confidence that inflation will converge towards our aim over the medium term. Yet, inflation convergence will likely proceed only gradually, and remains contingent on a highly accommodative monetary policy stance. Looking ahead, the evolution of monetary policy will be firmly guided by the outlook for price stability.