In particular, given the incentive structure embedded in the TLTROs, the programme is particularly attractive for banks with a dynamic lending performance. In addition, we have launched preparatory work in the event we make outright purchases of packaged corporate loans (asset-backed securities, or ABS).
This will also help us avoid the same policy missteps that contributed to the environment of increased risk-taking that has severely bruised the stability of financial systems worldwide. It is in this context that I will discuss some important policy issues. First, the crisis underscores the importance of flexibility in the implementation of monetary policy, and inflation targeting in particular.