To be effective, supervisory action requires a strong regulatory framework fully aligned with the most rigorous international standards. In late 2021, the European Commission published its proposal for implementing the most recent Basel Accord, finally completing the review of banking regulations begun more than a decade ago. Negotiations between the Council and the European Parliament are currently underway.
From the very outset, the ECB’s monetary policy strategy acknowledged that it is neither feasible nor desirable for inflation to be targeted on a short term basis.