Moreover, commercial banks still have to repair their balance sheets and reinforce their capital base. The current slack in the economy is dampening price developments, an assessment which is confirmed by the monetary analysis. Consequently, the Governing Council believes that current interest rates remain appropriate.
At the same time, the situation is not quite as dire as it was a few months ago, especially in terms of financial market functioning. Therefore, the first steps of a gradual phasing-out of non-standard measures can be envisaged, like a discontinuation of 1-year refinancing operations or a lower frequency for 3-month and 6-month refinancing operations.