By restoring capitalism to the capitalists, discipline in the system will increase and, with time, systemic risks will be reduced. In addition, the knowledge that major firms in markets far away can fail, without meaningful consequences at home, will restore confidence in an open global system and allow Ken and all of us to focus on our day jobs.
Should it become necessary to further address risks of too prolonged a period of low inflation, the ECB’s Governing Council is unanimous in its commitment to using additional unconventional instruments within its mandate. As regards fiscal policies, comprehensive fiscal consolidation in recent years has contributed to reducing budgetary imbalances.