The necessary coordination at national level must therefore be combined with mechanisms to ensure the agreement is able to cater to the existing productivity and activity-related differences across firms and sectors.8 Equally, where the standard of living of certain segments of households is hit particularly hard by rising energy costs, the incomes agreement should naturally seek to mitigate their straitened circumstances. In short, these considerations reveal the need to avoid overly sweeping measures to implement a potential incomes agreement that might prove too rigid for certain groups of agents. Third, any approaches that automatically link wages to past inflation or indexation clauses are also to be avoided9. The aim is precisely to reduce the risk of triggering a wage-price feedback loop. In this regard, workers with collective bargaining agreements registered up to March this year that provide for any form of wage guarantee clause linking the final wage increases agreed in 2022 to developments in inflation are admittedly in the minority. Nonetheless, the figure (30%) is notably higher than it was at the end of 2021, when it stood at 17%. Of even more concern is the fact that this figure rises to 50% of the total when considering the agreements entering into force in 2023, albeit still referring to a small number of agreements in this case. Fourth, any incomes agreement should provide for multi-year wage increase and job protection-related undertakings. This would offer households and businesses some certainty in their spending and investment decisions.

Admittedly, our objective as regulators remains relatively simple: it should be primarily to ensure that financial institutions, infrastructures and markets properly do their job of smoothly and efficiently channelling savings into productive investments. Yet our task is difficult as finance constantly evolves as a result of technological advances or as an answer to regulatory changes. This should prompt us to be both resolute and cautious in dealing with many questions such as whether there is an optimal mix of bank and market financing. The financial crisis has indeed revealed at least three major failures of our financial systems, be they bank or market oriented: excess leverage, excess complexity and excess opacity. Corrective actions have been implemented in these three areas. First, over the past few years, Basel III and various national or regional initiatives have led to a sizeable recapitalization of the banking system and especially SIFIs [systemically important financial institutions]. In the euro area, the Comprehensive Assessment of the balance sheets of 130 major banks shows how much progress has been made. Second, major reforms have been undertaken in order to facilitate the orderly resolution of large and complex financial institutions, thus providing better incentives ex ante to these large financial conglomerates. Such progress can be seen both in Europe, where the Banking Union is a major step forward, as well as abroad. Last, the scope of regulation has been extended to products and markets that remained too opaque in spite of their systemic relevance, such as some major classes of OTC derivatives.