The idea is to break the bank-sovereign nexus, cut the “doom loop” and thereby make the single currency area more resilient both to banking problems and to fiscal problems, should they emerge in the future. The Banking Union has three components. The first is the Single Supervisory Mechanism. The ECB will be given the ultimate responsibility and powers to supervise all euro area banks.
And keeping inflation at the 2 per cent target rate is the best contribution that monetary policy can make to the financial well-being of Canadians. The Bank’s assessment of the current output gap and the projected growth of potential output have a direct bearing on the Bank’s inflation outlook and monetary policy decisions.