frequent numerical target misses. nevertheless, the czech republic enjoys low inflation, and inflation expectations seem to be firmly anchored at low levels at present. monetary policy decision - making is rule - based and transparent, thereby enhancing the credibility of the cnb. such a framework allows an independent central bank to commit credibly to its long - term goal of price stability, and at the same time preserves enough discretion for an active anti - cyclical monetary policy that takes into account not only inflation, but also other factors such as variability of output.

of chicago press, vol. 34 ( s1 ), pages s293 – s331. bis central bankers ’ speeches was less intense and productivity - enhancing than in normal times, contrary to previous recessions. similar decrease in reallocation was found in the united kingdom by the bank of england 6. financing constraints also hit more particularly r & d financing : according to a banque de france study 7, r & d investment share becomes procyclical when credit constraints bites and does not increase proportionally in upturns. as the great recession was global, years of r & d efforts lost cannot be recovered by the purchase of technology from abroad, as all countries have been hit. in the medium term, this will weigh on productivity growth, which is partly fed by technical innovation. financing constraints may contribute to a depressed investment, especially in industries with heavier reliance on external finance or lower asset tangibility 8, which can slowdown capital stock and hence potential growth, but also lead to its aging and weigh on its productivity through the use of older equipment vintages. as we can see on this graph from a banque de france study 9, both the great depression and the great recession led to a significant ageing of the equipment stock. the governing council of the ecb has been particularly conscious of the acute strains in the financial system over recent years and the impairment of the credit channel. in particular, it has been concerned that bank deleveraging could reduce the supply of credit and undermine the supportive effects of lower interest rates on firms ’ balance sheets. this could have been a significant “ headwind ” for monetary policy and has reinforced the case for decisive action. to counteract this impairment of the credit channel, the governing council has, alongside other non - conventional measures which don ’ t need repeating, also launched two targeted lending programmes. these so - called tltros i and ii allow banks to borrow up to a fixed fraction of their loan portfolio at an interest rate linked to the ecb official rates. banks that make new loans in excess of their benchmarks receive a lower average cost of funding. this provides a powerful incentive to expand lending and goes some way towards alleviating funding risks when nominal interest rates are negative. in a further step to alleviate the credit channel, the governing council decided to include corporate bonds in its asset purchase programme in march 2016. this should directly reduce the cost of corporate borrowing in capital markets. overall, these measures have been quite effective in