Monetary Policy Transmission and the Banking System

Abstract

A stronger than expected monetary policy impact remains a downside risk to the euro area growth outlook, as mentioned in our last monetary policy statement. Thus we shall be closely monitoring the materialisation of such risks and calibrate accordingly the degree of monetary restriction, in particular in a context in which our staff projections are currently anticipating a gradual return of inflation towards our 2% symmetric target in the medium-run and with the risks to the inflation outlook being balanced.