examine developments in income in relation to those in consumption. for the january – march quarter, the year - on - year rate of change in real compensation of employees registered minus 0. 6 percent, which was significantly lower than the 3. 7 percent increase in real private consumption. in a situation where real wages per employee are likely to continue declining for the time being, the pace of improvement in real compensation of employees is likely to be moderate. in such a case, the uptrend in private consumption may weaken, leading to a slower rise in the inflation rate. thus, careful monitoring of future developments is required. nevertheless, i personally consider that, even if the uptrend in private consumption weakens slightly, this will not necessarily have negative effects on the economy in the long run. this is because a significant imbalance is currently observed among the paces of increase in the variables of prices, wages, and private consumption ; for example, real wages seem to be continuing to decline, even on a basis excluding the temporary effects of the tax hike. in such a situation, if weaker growth in private consumption restrains the rise in the inflation rate, it is expected that real wages will increase and private consumption will continue growing bis central bankers ’ speeches moderately at a pace in line with this wage increase. if demand increases in this way at an appropriate pace in a situation where supply - side constraints are beginning to be acknowledged, a more balanced and prolonged economic recovery, albeit moderate, will likely be achieved. d. outlook for prices as for the outlook for prices, i take a more cautious view than the forecast in the bank ’ s baseline scenario. therefore, i formulated a proposal to change the expression regarding the outlook for prices in the april 2014 outlook report, although it was defeated by a majority vote during the monetary policy meeting. specifically, i proposed to change the expression that the year - on - year rate of increase in the cpi “ is likely to be around 1¼ percent for some time, follow a rising trend again from the second half of this fiscal year, and reach around 2 percent around the middle of the projection period ” to a new expression that it “ is likely to remain generally stable around the current level over time ”. i consider that, for the time being, developments in prices will depend mainly on the balance between strengthening of trend inflationary pressure – due mainly to the improvement in the output gap – and waning of upward pressure from import prices. on this point, there seems to

andreas dombret : boring banking? opening statement by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the panel discussion, organized by “ bundnis 90 / die grunen ”, frankfurt am main, 28 may 2013. * 1. * * introduction let me start with some reflections on the slogan of today ’ s event, “ boring banking ”. actually, i will argue that banking has become more challenging since the outbreak of the crisis. and i am not at all sure whether making banking boring is exactly what we want to do. regulators are working hard on the “ too - big - to - fail ” issue. we want to ensure that large banks are resolvable. do we make banking boring when banks can no longer benefit from an implicit state guarantee? do we make banking boring when large banks can no longer rely on the tax payer stepping in when losses pile up? i don ’ t think that a functioning resolution system makes banking boring. at the same time, we are analyzing how we can best use new instruments to reduce procyclicality in the banking system and to curb exaggerations. do we make banking boring when we raise costs for banks that simply earn money by following and augmenting the market trend? i don ’ t think that driving back pro - cyclicality makes banking boring. another topic on the reform agenda is remuneration. do we make banking boring when we combat greed and short - termism? i don ’ t think that aligning compensation more closely to a bank ’ s longer - term success makes banking boring. finally, we have to distinguish between banking and finance. making banking boring does not necessarily mean making finance boring. only think of the shadow banking issue. 2. simplicity and complexity i was asked to speak about simplicity and complexity. i want to start with the latter. i am deeply concerned about complexity. where does the real risk of complexity lie? with respect to regulation and the change of the landscape it is not so much a single measure or a single initiative that creates complexity. it is more the interplay of different approaches. let me give you two examples : one important strand of regulation is concerned with liquidity. regulation sets new requirement in order to protect the banking system against a shortage of liquid assets. at the same time, a financial transaction tax is envisaged that might have drastic effects on the liquidity on some important markets. how do these measures inter