Second, a further impairment in the transmission of our stance, in particular via the bank lending channel, for which a targeted LTRO or an ABS purchase programme might be the right response. Third, a worsening of the medium-term outlook for inflation, which would warrant a more broadbased asset purchase programme.
The Governing Council is committed – unanimously – to using both unconventional and conventional instruments to deal effectively with the risks of a too prolonged period of low inflation. Despite these efforts to enhance transparency, the predictability of the past will not readily return. Hence, judgement is likely to play a greater role in decision-making, and this involves trade-offs that need to be explained.