Inflation expectations for the euro area over the medium to long term remain firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2%. Looking ahead, we will monitor economic developments and money markets very closely. We will maintain a high degree of monetary accommodation and act swiftly, if required, with further monetary policy easing.
The SSM has already published a proposal on provisioning methodologies for new NPLs that will increase banks’ loan loss provisions and resilience. To ensure the most effective reduction of NPLs, legacy problems should be handled with a combination of bail-in and recapitalization by national funds, in line with the state aid guidelines (2013) set out by the Commission.