margin between deposits and credits. in addition, competition in private banking with foreign clients will continue to intensify. and finally, wealth management data from the snb ’ s swiss balance of payments 2011 report shows that international receipts from bank financial services stood at chf 15. 1 billion in 2011, equivalent to 43 % of the total value added in the banking sector in 2011 ( chf 35 billion as reported by the swiss bankers association ). the swiss bankers association reports that in 2011, around 51 % of assets under management at swiss banks originated from foreign customers ( cf. “ der finanzplatz schweiz und seine bedeutung ”, swiss bankers association, 2012 ). it is important not to underestimate the economic importance of international transmission of financial shocks via bank linkages. goldberg and cetorelli ( 2010 ) document the fact that global banks transmitted the international shock during the 2007 – 09 financial crisis to emerging market economies, leading to both cross - border lending contraction and contraction of domestic lending. bis central bankers ’ speeches will have to adapt to changing international standards and international tax agreements. in such an environment, it is hard to maintain profit margins and retain clients. the second challenge for the swiss financial sector relates to signs of overheating in the swiss residential real estate market. over the past two years, the snb has repeatedly drawn attention to these risks. residential mortgages are very important in switzerland since they account for around 70 % of the assets of domestically oriented swiss banks. there are signs that residential properties are overvalued in the geneva, zurich and zug regions, for instance, as well as some tourist areas. even though, there were recent indications of a possible slowdown of momentum, the risk remains of a further build - up of imbalances followed by a significant price correction in the residential real estate market 5. against this backdrop, it is important that banks use prudent credit standards to limit potential default risks and are well - capitalised so they can withstand such potential losses should they arise 6. the third challenge is specific to switzerland ’ s systemically important global banks. like their peers abroad, they will have to adapt to new supervisory requirements that address “ too big to fail ” issues and the resulting moral hazard. in the past, systemically important banks enjoyed an implicit bailout guarantee by their governments. not only did this lower their refinancing costs, but it also led to various distortions in the areas

kazuo ueda : the bank's semiannual report on currency and monetary control statement by mr kazuo ueda, governor of the bank of japan, before the committee on financial affairs, house of representatives, tokyo, 10 april 2024. * * * introduction the bank of japan submits to the diet its semiannual report on currency and monetary control every june and december. i am pleased to have this opportunity today to talk about recent economic and financial developments and about the bank's conduct of monetary policy. i. economic and financial developments i will first explain recent economic and financial developments. japan's economy has recovered moderately, although some weakness has been seen in part. exports have been more or less flat. with corporate profits improving, business fixed investment has been on a moderate increasing trend. the employment and income situation has improved moderately. it is becoming increasingly likely that wages will continue to increase steadily this year, following the firm wage increase last year, reflecting this year's annual spring labor - management wage negotiations. private consumption has been resilient, although the impact of price rises and developments such as a decline in automobile sales due to a suspension of shipment at some automakers have been observed. with regard to the outlook, japan's economy is likely to continue recovering moderately, supported by factors such as the materialization of pent - up demand, although it is expected to be under downward pressure stemming from a slowdown in the pace of recovery in overseas economies. the year - on - year rate of increase in the consumer price index ( cpi ) for all items excluding fresh food has been in the range of 2. 5 - 3. 0 percent recently, mainly on the back of the fact that, despite waning, the effects of a pass - through to consumer prices of cost increases led by the past rise in import prices have remained, and services prices have increased moderately. regarding the outlook, it is likely to be above 2 percent in fiscal 2024 and decelerate thereafter. meanwhile, toward the end of the projection period of the january 2024 outlook report ( outlook for economic activity and prices ), the bank projects that underlying cpi inflation will increase gradually toward achieving the price stability target of 2 percent. concerning risks to the outlook, there are extremely high uncertainties surrounding japan's economic activity and prices, including developments in overseas economic activity and prices, developments in commodity prices, and domestic firms'wage - and price - setting behavior. under