labor market have continued to improve steadily, as shown by the fact that the active job openingsto - applicants ratio rose to 1. 03 in december 2013. employee income has also picked up moderately because, while total cash earnings per employee have generally bottomed out, the year - on - year rate of increase in the number of regular employees has expanded. for domestic demand, particularly private consumption, to maintain its firmness concurrently with a rise in prices, it is essential that the virtuous cycle of improvement continue in the employment and income situation supporting consumption. i intend to monitor the results of this spring ’ s wage negotiations and the extent to which employee income as a whole improves, including the degree to which the number of employees increases. bis central bankers ’ speeches iii. achieving the price stability target a. forecasts for prices through fiscal 2015 thus far, i have outlined the bank ’ s assessment of japan ’ s recent economic activity and prices. based on this assessment, the bank compiled and released the policy board members ’ forecasts for economic activity and prices through fiscal 2015. in terms of the medians of the members ’ forecasts for prices, the year - on - year rate of change in the cpi ( all items less fresh food ) is expected to register 0. 7 percent for fiscal 2013. excluding the effects of the consumption tax hikes, it is projected to reach 1. 3 percent and 1. 9 percent for fiscal 2014 and 2015, respectively. it is likely to reach around 2 percent – the price stability target – toward the latter half of the projection period, that is, through fiscal 2015. b. the price stability target and price indices the bank judges that the basic indicator used to express the price stability target must be a price index that comprehensively covers goods and services consumed by households and that the general public at large is accustomed to. to this end, the bank views the cpi for all items as important. however, since the cpi for all items can be affected by temporary fluctuations of some of its components, the bank uses the cpi ( all items less fresh food ) to identify the underlying trend of inflation ; fresh food is excluded from the index because it is a highly volatile component. to grasp the underlying trend in the cpi, the bank also examines reference indices such as the cpi ( all items less food and energy ), the laspeyres chain index ( all items less fresh food ), and the 10 percent trimmed mean. as for other price indices, the cpi

. the lender of last resort may well be producing a result that is better for everyone in the economy when it intervenes in a financial crisis. but since the counterfactuals are difficult to establish, and the these issues are discussed in s5, s7 and b5. i am quoting here from my 2011 ( http : / / www. bis. org / review / r110414f. pdf ). paper, “ central bank lessons from the global crisis. ” bis central bankers ’ speeches moral hazard argument is easy to deploy, the public sector may shy away from acting as lender of last resort except in extremis. hence the phenomenon of too big to fail. if policymakers reach a point at which they confront a choice between allowing a large and / or systemically interconnected bank to fail without their having reasonable assurance that its essential activities will continue, they may well step in to “ save ” the financial institution. by “ save ”, i mean, allow the bank to continue to exist and to carry out the functions that are needed to prevent a financial crisis. it is essential to emphasize that this requires a resolution process that does not, and should not, preclude actions to ensure that equity and bond holders lose all or most of the value of their assets, to an extent that depends on circumstances. and the ability to do this depends on the resolution processes for insolvent financial institutions. in this context, the progress that has been made since 2008 in developing effective resolution mechanisms will play a key role in dealing with the too big to fail problem by significantly reducing the probability of a bank being too big to fail. this is a good point at which to turn to the regulation and supervision of the financial system. lesson t5 : regulation and supervision of the financial system. 11 the natural and sensible reaction to the problem that the central bank and the government face when the dark clouds of a massive financial crisis appear on the horizon, is to make two sets of decisions. the first relates to its immediate actions and the short run, where the goal should be to intervene in a way that prevents the massive crisis, at minimum future cost to the economy and the society. the second is for the longer run, to rebuild the financial system in such a way that the probability of having to confront such a situation again is reduced to a very low level. hence regulations should be strengthened, essentially as they have been recently, through the activities of governments,