TPI: financial stability as a precondition for price stability Over the following two years, the macroeconomic backdrop changed fundamentally. After a short spell of negative annual inflation rates in the euro area at the end of 2020, inflation started its sharp upward trend.
In zeroing in on the potential governance fragilities that were unearthed, major legislative changes were enacted; regulation and supervision were reinforced and backstopped by more substantial penalties for violations; and collaboration among regulators was significantly enhanced at domestic and international levels.