Central banks and international financial crises In the international financial community, governments, central banks, financial institutions, and the academia are now engaged in a hot debate over the reform of international financial system, including exchange rate regimes and short term capital flows.
In addition, the deterioration of the macroeconomic situation alongside the uncertainty surrounding the outlook for inflation and interest rates pose risks to financial stability. The ECB needs to be alert to any emergence of fragmentation across euro area financial markets, which could compromise the timely return of inflation to its target.