In this new setting, community banks differentiate themselves by focusing on the specific needs of their local markets and by providing a high level of service and attention to the customers in those markets. Community banks, that is, banks with assets of $ billion or less, continue to be quite successful.
This medium-term orientation reflects the fact that prices can be volatile in the short run for reasons outside the control of the ECB, or indeed any central bank, such as changes in indirect taxes and shocks to commodity prices, especially oil prices. It would therefore be sub-optimal for a central bank to stick rigidly to its inflation objective over very short-term horizons.