gradually in 2009. risks to price stability at the policy - relevant medium - term horizon remain clearly on the upside and have increased over the past few months. these risks include notably the possibility of further increases in energy and food prices and of increasing indirect effects on consumer prices. there is a very strong concern that price and wage - setting behaviour could add to inflationary pressures via broadly based second - round effects. the governing council is monitoring price - setting behaviour and wage negotiations in the euro area with particular attention. furthermore, there are potential upside risks from unanticipated rises in indirect taxes and administered prices. against this background, it is imperative to ensure that medium to longer - term inflation expectations remain firmly anchored at levels in line with price stability. the shift in relative prices and the related transfer of income from commodity - importing countries to commodityexporting countries require a change in the behaviour of companies and households. therefore, broadly based second - round effects stemming from the impact of higher energy and food prices on price and wage - setting behaviour must be avoided. all parties concerned, in both the private and the public sector, must meet their responsibilities in this regard. in this context, the governing council has repeatedly expressed its concern about the existence of schemes in which nominal wages are indexed to consumer prices. such schemes involve the risk of upward shocks in inflation leading to a wage - price spiral, which would be detrimental to employment and competitiveness in the countries concerned. the governing council therefore calls for such schemes to be avoided. the monetary analysis confirms the prevailing upside risks to price stability at medium to longer - term horizons. in line with our monetary policy strategy, we take the view that the sustained underlying strength of monetary and credit expansion in the euro area over the past few years has created upside risks to price stability. over recent quarters, these risks appear to have become manifest as inflation has trended upwards. not least in the face of the ongoing tensions in financial markets, the monetary analysis helps to support the necessary medium - term orientation of monetary policy by focusing attention on the upside risks to price stability prevailing at medium to longer horizons. while the growth of broad money and credit aggregates is now showing some signs of moderation, also reflecting the policy measures taken since 2005 to address upside risks to price stability, the strong underlying pace of monetary expansion points to continued risks to price stability over the medium term. the current yield curve has led to very rapid increases in time deposits and to a substantial decline in annual

sabine lautenschlager : looking ahead – closing remarks at the ecb forum on banking supervision closing remarks by ms sabine lautenschlager, member of the executive board of the european central bank, at the ssm banking supervision forum, frankfurt am main, 4 november 2015. * * * let me close this conference by making a few remarks on the political climate in which regulators and supervisors are working and which the previous panel discussed. and while today is certainly a day for celebration, i also want to mention one major challenge the ssm is facing in the years to come. in my view, we should fairly swiftly bring to a close the global reform agenda. after nearly a decade of regulatory reforms the public, the media and policy - makers are weary. regulatory fatigue is spreading ; the pendulum is swinging back from widespread pressures for regulation to a preference for lighter banking regulation and supervision. we therefore have to carefully channel what is left of the original momentum. i join those calling for an end to the development phase and a turn to the implementation phase of regulatory reforms. in this context, it will be key that we not only implement the many new rules and standards diligently ; it is even more important to actually use newly acquired supervisory instruments in a consistent and risk - oriented manner. we cannot allow the fatigue we are experiencing to lead to supervisory forbearance. turning now to the ssm, i would like to mention one challenge i am very concerned about. although many projects such as the work on harmonising options and national discretions are making good progress in reducing divergence, the ssm on its own is not sufficient to address the remaining fragmentation in the euro area banking system. the flexibility given to member states when implementing directives might result in a worst - case scenario consisting of 19 different national banking acts varying from a word - by - word transposition of european norms to national gold - plating. don ’ t misunderstand me : the transposition of directives into national law is the prerogative of national lawmakers. but as many directives define key supervisory powers, it is of utmost importance to agree on common key supervisory instruments that are available to the ssm. let me just provide one example. diverging national implementations of the brrd result in noticeable differences across countries. the ecb has to be sure that the distinct national requirements are met before it issues, for example, a “ failing or likely to fail ” verdict. for a “ single