Financial institutions have almost resolved the NPL problem, and stability was regained in the financial system. Major and regional banks posted their highest-ever profits in fiscal 2005, exceeding the record of the bubble period, and their interim results indicated that their profits have remained high in the current fiscal year.
The underlying pace of monetary expansion remains subdued, consistent with contained inflationary pressures over the medium term. Looking ahead, we are firmly committed to maintaining price stability in the euro area, in line with our mandate.