On the other hand, with policy rates at record low levels and additional liquidity-providing measures adopted in so many countries, the possibility of inflation risks emerging sometime later is not something that can be excluded. Retaining such exceptional policy measures for too long might aggravate the upside risks to price stability and sow the seeds for future imbalances in financial markets.
Of course, in the case of a national sovereign crisis, financial assistance too might play a role. Therefore, we have agreed to fill up the IMF’s reserve tanks. Such assistance, however, has to be bound to conditionality, to an incentive to redeem the official credits and to a fair burden-sharing between official and private sectors.