BIS central bankers’ speeches  3  The extension of reverse qualified majority voting to the preventive arm of the Pact, which the European Parliament rightly insists on, is not about a perceived loss of sovereignty. It is a mechanism that would allow all Member States to protect themselves better from the harmful effects of unsound fiscal policies.
The crisis made it clear that price stability and financial stability are inextricably linked and that pursuing the first without regard for the second risks achieving neither. Indeed, low, stable and predictable inflation and low variability in activity can breed complacency among financial market participants as risk taking adapts to a perceived new equilibrium.