Reversing the slowdown in growth momentum was the key rationale for this distinct shift in the stance of monetary policy, even as unseasonal rains caused temporary spikes in food inflation in the second half of 2019–20. Consistent with this policy stance, liquidity conditions were also kept in ample surplus all through since June 2019.
A broadly similar set-up has been up and running in the United States ever since the Basel II regime was implemented. Any institution whose balance sheet exceeds a certain threshold there is subject to the Basel rules. However, it would only be possible to do the same here in Germany by creating rules at the European level.