Whether it be dealing with the effects of storms blowing in from abroad, or having protection from the sun on those warm Irish summer days, the Central Bank stands ready to adjust the CCYB (buffer) in either direction as the risk environment evolves, in order to support a sustainable supply of credit to the economy. We can’t control the weather.
Whether the economic recovery becomes more solid, and how quickly inflation dynamics become more self-sustained, depends not just on the current monetary policy stance, but also on other policies, as I have discussed on several other occasions. Restoring a sense of direction – and therefore confidence – would be the simplest and yet most powerful way to deliver economic stimulus.