Inaction – or weak action – in our fight against inflation would have backfired as it would have eroded the public’s confidence in our commitment to price stability. Our timely response was key in keeping inflation expectations close to our target. Nevertheless, current inflation rates in the euro area remain too high.
The key objectives when establishing these guard rails should be •  to strengthen sustainability,  •  to steer incentives, and  •  to avoid procyclicity. For the financial sector as for regulators and supervisors, these principles will encourage a reversion to the role of a service industry.