However, they do not dispute the direction of the change, and as their analysis compares 1991-2001 to earlier periods they miss a very recent acceleration toward floating exchange rates and inflation-focused monetary policies. BIS Review 59/2004  5  policy should focus on delivering low and stable inflation, with the determination of exchange rates left to free markets.
First, these measures tended to reduce pressure that markets exerted on governments to pursue fiscal discipline. Second, treading further along the path of interventions in government bond markets implies increasing risks of monetary financing of fiscal debt. Third, purchases of assets in markets under stress implies a financial risk for the Eurosystem’s balance sheet, which may eventually lead to fiscal transfers.