Our excess liquidity totalled around € billion at yearend. The lengthening of the Bank’s balance sheet also drove up its profit, which stood at € billion for the 2017 financial year. This is roughly € billion more than one year before.
In its standard form, in which the optimal short-term interest rate is a function of both the deviation of the inflation rate from its target and the output/unemployment gap, it accommodates both formal inflation targeting and a more flexible growth-inflation balance as objectives of monetary policy.