In addition, as long as markets are partially segmented across international borders, market power may enable firms to respond to local demand conditions—possibly resulting in lower prices in areas with weaker demand. Secondly, from a macro perspective, prices take time to adjust.
Where does the ECB stand in terms of phasing out non-standard measures? Using its broad operational framework, the Eurosystem in a context of a severely impaired interbank market was capable to alleviate banks’ concerns about access to liquidity and thereby to support the flow of credit to households and corporations and ensure the maintenance of price stability.