This is now the single most critical factor in determining the course of monetary policy. Last December, the ECB Governing Council started the gradual process of monetary policy normalisation. And we have been fortunate to have our renewed monetary policy strategy in place as we face the current turmoil. The ECB strategy review was a critical turning point in ECB monetary policy.
Figure 2  Figure 3  Ireland credit-to-GDP gap  Ireland: simulated counter-cyclical capital buffer  (per cent)  (per cent of risk weighted assets)  However, while counter-cyclical capital buffers would have been helpful, they have shortcomings.