Potential implications that a protracted period of monetary accommodation may have on financial stability Finally questions have been raised on the potential implications that a protracted period of monetary accommodation may have on financial stability. First of all, not acting forcefully would have had very serious financial stability implications.
Second, looking forward, our monetary policy accommodation is essential to keep medium to long-term inflation expectations well anchored also for financial stability reasons: a fall of expected inflation leads to an increase in expected real interest rate which makes debt sustainability more difficult.