Chart 3: Share of bank and non-bank financing in total non-financial corporation debt financing in the euro area and the United States (outstanding amounts; percentages)  3 / 12  BIS central bankers' speeches  Chart 4: Total debt financing of NFCs and MFI loans to NFCs in the euro area (annual changes in percent)  4 / 12  BIS central bankers' speeches  Such diversification in financing sources is good for the economy, making business investment more resilient throughout business cycles. The underlying strength of the euro area economy continues to support our confidence that the sustained convergence of inflation to our aim will proceed. Euro area annual HICP inflation has continued to increase and stood at 2.2% in October 2018, mainly reflecting higher energy price inflation. On the basis of current futures prices for oil, headline inflation is likely to hover around current levels in coming months. While measures of underlying inflation remain generally muted, they have been increasing from earlier lows, amid high levels of capacity utilisation and tightening labour markets. Looking ahead, underlying inflation is expected to increase further over the medium term, supported by our monetary policy measures, the ongoing economic expansion 5 / 12  BIS central bankers' speeches  and rising wage growth. Overall, though, significant monetary policy stimulus is still needed to support the build-up of domestic price pressures and headline inflation developments over the medium term.

Significant progress has been achieved in Asia in this recent decade to strengthen the institutional arrangements and the capacity to safeguard financial stability. This includes putting in place more comprehensive regulatory frameworks, improving supervisory approaches and having clear mandates for central banks and supervisory authorities to deal with system-wide risks. While these measures have yielded tremendous pay offs, efforts have continued to be made to strengthen further the resilience of the financial system. New initiatives are being pursued to enhance surveillance and crisis management tools to enable swift responses to emerging risks and vulnerabilities in the financial system, including those within the traditionally unregulated segments of the financial system. Authorities in Asia are also continuing to refine and sharpen the efficacy of “macroprudential” instruments to manage excesses and imbalances in the financial system. Asia already has considerable experience with these instruments during periods of escalating asset prices and excessive financial market volatility. They therefore already represent an important part of the broader toolkit for managing risks to financial stability. The effort to implement global regulatory reforms is also now underway in Asia, with many jurisdictions making significant progress in detailing out rules to implement the Basel III standards. The international reform package aims to significantly raise the resilience of the global banking system and to promote sound risk-taking. The standards will see banks holding larger amounts of capital, including buffers which can be drawn down as losses occur, thus ensuring their continued ability to support lending to the economy even during times of crisis.