At the same time, concern about the sustainability of the public finances in some euro-area countries has led to strains in a number of banking sectors and a small number of institutions remain reliant on central bank liquidity, accounting for a substantial share of the overall refinancing volumes.
Then, traditional financial relationships aren’t necessarily still true. Finally, time-honored policy transmission mechanisms no longer seem to hold in the past. In response to these challenges, BSP has had to realign our own policy framework – to go beyond considering price stability as a sole objective to one that nurtures financial stability alongside price stability.