3rd – The role of financial stability in the adjustment of the Portuguese economy In Portugal, the banking system has been playing a fundamental role in meeting the growing financing needs of both the Portuguese economy and households, offsetting the – chronic – scarcity of domestic savings through recourse to external financing, chiefly after joining the Economic and Monetary Union.
One such oversimplification is to say that governments are for growth and central banks are for price stability. Another oversimplification is to assert that there is a tension between growth and inflation, and that one necessarily has to play the trade-off between growth and inflation in policy making. 15.