There was perhaps a failure on our part to recognise this as a broader financial stability risk, and to react either with a tighter monetary policy stance, or with macroprudential tools. Similar settings would probably result in a different response today, given our explicit financial stability mandate.
The definition recognises the fact that at times inflation may temporarily move outside that target range. That is currently occurring as a result of higher oil prices which are a kind of sectoral shock. The weak exchange rate is also contributing to higher prices. The most recent HICP inflation rate shows that euro area consumer prices increased by 2.4% in the year to July.