what are the sources of the divergence in inflation expectations between financial markets and households? iii. firms ’ inflation expectations are also of primary interest for central banks while this conference is mostly about households ’ expectations, i would like to stress that monitoring firms ’ inflation expectation is also of primary interest from a monetary policy perspective. compared to households, information on inflation expectations within firms is even scarcer. this scarcity of information is in sharp contrast with the relevance of such information for the conduct of monetary policy : at the end, firms are the price setters in the economy and also take part in the wage setting process. besides, there is evidence that their expectations affect their economic decisions like employment or investment. one of the most comprehensive evidence has been produced for new zealand ’ s firms, showing that inflation expectations among business leaders are not so different from household expectations. in europe, banca d ’ italia has also developed a very rich and informative firms ’ expectations survey since 1999. the bundesbank has also conducted a very interesting survey asking tradeunions and employers what was the relevant inflation underlying the last collective wage agreement. comparative information on such issues across the euro area would be very useful. i am convinced that more analysis on firms ’ expectations would produce very valuable and relevant information for our monetary policy. conclusion let me now conclude by saying that we need to better measure consumer and firm inflation expectations. this lack of information prevents our communication policies from being fully efficient. one important question for monetary policy is what kind of communication tools can be used to better communicate with the general public and influence their inflation expectations. this conference is a unique opportunity to benefit from the analyses of the most distinguished experts on the various exciting issues that are related to household expectations. i wish you very fruitful discussions. thank you for your attention. figure 1. long term inflation expectations for the euro area source : bis report “ recent developments in the global economy ” ( august 2019 ) - figure 2. households perceive quite well the overall evolution of inflation source : b. coeure ( 2019 ). inflation expectations and the conduct of monetary policy, speech at an event organised by the safe policy center, 11 july 2019 figure 3. recent divergence between the evolution of household inflation expectations and market based - measures sources : ecb, european commission

the twelve - month rate of lending growth was 35 %, although it has since slowed down. dmb lending increased by just over 26 % last year, somewhat more than in 1999. total lending by the credit system rose by 18. 4 %. the largest growth was in corporate lending, or 23 %, while household lending growth was slightly less at 19 %. in comparison with 1999, household lending growth increased but corporate lending growth slowed down somewhat. excluding exchange rate and price indexation adjustments, the total annualised increase in lending by dmbs during the second half of 2000 was just under 14 %, compared with 22 % during the same period in 1999. lending growth has clearly slowed down, although it is still too great to be compatible with long - term stability. heavy lending by commercial banks swells their balance sheets and weakens their equity positions by the same token. the combined equity ratio of the three commercial banks was 10. 21 % at the end of 1999, but was down to 9. 35 % at the end of 2000. the mandatory minimum equity ratio is 8 %. in part the equity position is maintained with subordinated loans, as authorised by law ; excluding these, the equity ratio was 7. 93 % at the end of 1999 and went down to 6. 28 % at the end of last year. this is a cause for concern, as the central bank has repeatedly pointed out. it leaves the commercial banks worse equipped to tackle tougher economic times than would otherwise be the case. inflation overheating of the economy generated inflationary pressures after spring 1999. inflation gradually climbed in 1999 and until spring last year, when the twelve - month rate of increase measured 6 %. it slowed down again as the year wore on and measured 3. 5 % from the beginning to the end of the year. over the twelve months until the beginning of march this year, inflation was 3. 9 %. both domestic overheating and external conditions contributed to the high inflation figure shown last year. three main factors were at work. housing prices led to a 1. 25 % increase in the consumer price index. petrol prices pushed the cpi up by just under 0. 25 %, compared with almost 1 % the previous year. finally, market services, i. e. those not provided by the public sector, began rising soon after the signing of the first wage agreements, which also involved the largest section of the labour force. the effect was a 1. 25 % rise in the cpi