italy and the others? before the crisis there were marked differences in wage costs and competitiveness, in greece in particular. these persistent differences have created serious tensions within the euro area. macroeconomic imbalance adjustments are not made via the exchange rate in the monetary union. that ’ s why it ’ s essential that the labour market and the goods and services markets work well. the bank for international settlements is worried about risks caused by monetary policies that are too accommodative. what ’ s your reply to that? our main objective is to ensure price stability. the financial crisis has created deflationary risks. our monetary policy measures have played a key role in the economic recovery, which is necessary for inflation to gradually return to levels in line with our objective. the question is knowing whether the central bank has gone too far in its monetary policy easing. now that the gap between growth potential and real activity is narrowing, have we accomplished our mission? at this stage, my reply is no. the economic expansion that is under way is not yet feeding through into higher inflation. we are not changing our priorities, but we must take into account the improvement in economic conditions when calibrating our measures. should an end date for qe be announced? no new decision has been taken since the governing council meeting on 7 september. we had concluded that a very accommodative monetary policy stance would remain essential to our mission and that we would decide in the autumn on the calibration of our purchase programme for the period beyond the end of the year. 2 / 2 bis central bankers'speeches

- hand side ). surveys point to continued employment growth in the coming months. put differently, one of the key channels in policy transmission – if not the most important one – is currently not working as usual. [ 31 ] structural factors, such as the rise in sick leave, the higher share of services in value added and a shortage of workers, are contributing to this. but demand is playing a key role, too. in the services sector, for example, the share of firms reporting demand as a factor limiting business remains close to historical lows. a tight labour market, in turn, increases the bargaining power of workers in an environment in which wages are already expanding at a historically high pace. if wages increased by more than currently projected, paired with potentially lower productivity, firms would be more likely to pass on higher labour costs to consumer prices. this risk is corroborated by evidence that, as inflation increases, prices and wages become less sticky – that is, they are adjusted more frequently, as the cost of keeping them unchanged increases ( slide 15, right - hand side ). in such an environment, whether a wage - price spiral will unfold will ultimately depend on the ability and willingness of firms to absorb higher unit labour costs in their profit margins. this, in turn, depends on the economic environment in which firms operate, and hence on monetary policy. recent work by ben bernanke and olivier blanchard has examined the role of labour market tightness for the united states. [ 33 ] their work suggests that unless the ratio of vacancies to unemployed workers falls back below its pre - covid level, inflation is unlikely to return to target in the next three years. policy implications and conclusions all in all, the risks to the inflation outlook are tilted to the upside, reflecting both supply - and demand - side factors. the question is how monetary policy should take such risks into account. the imf has recently issued a clear recommendation : if inflation persistence is uncertain, risk management considerations speak in favour of a tighter monetary policy stance. there are two reasons for this. first, the costs of protecting the economy from upside risks to inflation are comparatively small, as the policy rate can be brought back to neutral levels faster than if policymakers acted under the assumption of low inflation persistence ( slide 16, left - hand side ). second, it is very costly to react only after upside risks to inflation have materialised, as this could destabilise inflation expectations and thus require a