Others expressed the view that connotations of “understanding” did not allow for smooth interpretations of the Bank’s policy stance in its efforts toward achieving price stability, and in overcoming deflation in light of the current situation. The Bank’s decision to introduce “the price stability goal in the medium to long term” also took into account such various views.
Unfortunately, this happens while the banking sector in at least some countries in Europe is still struggling with NPLs from the previous crisis. How big the hit will be is still very uncertain. Yet it would be wise for both policymakers and banks to brace for impact. If this is the case, what should policymakers do now?