But bad monetary policy, if sustained, will prevent the economy from reaching its maximum growth rate. In this context, ongoing bad monetary policy will reduce growth below its maximum rate over a period of many years, leading to a permanent loss of output. Clearly, bad monetary policy, or the inadequate implementation of policy within the current framework, is something we want to avoid. 3.
From the “old normal” to the “new normal” – drivers of change In the aftermath of the financial crisis and the global recession, Europe’s banks face an environment that previously would have been considered abnormal but which nowadays has become so commonplace as to be perceived as the “new normal”.