Conversely, it must also be said: monetary policy needs an efficient, highly competitive and stable financial system. In the first place, a financial sector that is susceptible to disruption poses risks to the entire monetary system, and thus also to the safety of the currency. Secondly, in a stable environment monetary policy impinges on economic activity more smoothly.
That was and is true of the Bundesbank’s monetary policy. It is bound to apply to the ESCB’s monetary policy as well. II Clarity now obtains in some matters of significance to financial market players concerning the euro. The future framework for economic policy action is now emerging ever more clearly.