Foremost among these is the idea that the economic recovery is hindered by weaknesses in bank balance sheets, and that if the weak European banks were to be fixed, growth would inevitably return. Naturally, policy-makers have been aware of the negative effect that weak bank balance sheets and deleveraging have had by restricting the normal flow of credit to the economy.
Particularly, the rate of core inflation nowadays is moving substantially below the lower bound of the Bank of Korea's target range. In the last few months, upward price movements have been observed in several countries.