Similarly – as recommended by the European Banking Authority – the build-up of capital buffers by banks will reassure markets of the resilience of the banking system and create the conditions for a more stable financial industry in Europe.
Stronger fiscal institutions combined with reforms boosting the long-term growth and competitiveness of euro area economies and a more resilient banking system are the right way to address the “d” factor. The overarching principles guiding monetary policy Knowing that monetary policy does not cure structural economic malaise is one of the overarching principles guiding central banks.