it ’ s a discussion we ’ ll have on the basis of the economic indicators. you know we are very pragmatic people, we look at the figures and then we ’ ll see how inflation is being passed on to what we call underlying inflation and also how inflation is being passed on to wages, i. e. we ’ ll see if wage negotiations are taking account of price increases. at the moment, that ’ s not really the case. in any case, it won ’ t be in 2017, there will be no increase in the ecb ’ s interest rate in 2017. it ’ s something we ’ ll examine in the light of the economic indicators, sorry to disappoint you. germany is becoming impatient. there ’ s talk of inflation which could exceed 2 % on an annual basis in germany this year. inflation which hurts german savers. wolfgang schauble, minister of finance, is calling on the ecb to act this year. what do you say to him? first, mr schauble has always been very respectful of the treaties and the independence of the central bank, so i am not too worried on that front. and in general, germans understand very well that the european central bank has an inflation mandate for the euro area. they understand that inflation in the euro area should return towards 2 % and i think they also understand that to have a strong economy in the euro area is in the interests of germany. and that ’ s what we are working on. doesn ’ t this difference, at least between germany and the rest of the euro area in respect of inflation, illustrate the inability of monetary policy to act when faced with a currency area which is still heterogeneous, the euro area? that ’ s quite true. that ’ s quite true. it ’ s a problem we had before the financial crisis, with a large divergence in labour costs in the euro area, which incidentally the central bank at the time, headed by jean - claude trichet, spoke out against ( without much of a result, but we did speak out ). as a central bank we can only work effectively if the economies of the euro area are sufficiently convergent. convergence is needed in the euro area for monetary policy to function well, but also if you want to pave the way for a further strengthening of the euro area, because the various member states have to trust each other, and for that their economies need to be comparable. this

to continue, unless we collectively take action to address it. now, we know that the situation in the challenge is complex. the decline isn't driven by one issue or one cause ; it's a combination of factors. one important driver is that the volume of correspondent banking flows is relatively small in this region. it's a combination of small populations dispersed over far - reaching and diverse geographical areas, and it often encompasses very remote locations, and that makes it difficult for correspondent banks, or even potential correspondent banks, to achieve economies of scale. so that's one driver. a second important issue is that some countries have found it challenging to meet international regulatory requirements because they're small, they've got lots of competing demands on their resources, and that's challenging. and the regulations, we know that the bar is going up, so it's not easy. but we do need to find a solution to this issue. 1 / 3 bis - central bankers'speeches the withdrawal of correspondent banking relationships poses large risks to economic and financial stability in the pacific region at the household, the business and the government level. remittances, as we know, can be an important source of incomes for households. businesses rely on the ability to receive payments for exports, including tourism flows, which for many countries is very important. and governments also need to be able to import key supplies for their people and their nations. so maintaining the ability to send and receive these flows internationally is essential. i'd have to say, pleasingly, there are some green shoots. we at the bank welcome the initiatives by the pacific islands forum secretariat and the world bank, including the correspondent banking relationships'road map and the strengthening correspondent banking relationships project. we at the bank have met with the world bank's team several times to provide comments on the proposal and we're really pleased to hear of the progress that they've made to date. it's also encouraging to hear of the wideranging commitment from the pacific island countries to participate in the project – that's really important – and we look forward to future conversations with all of our pacific island counterparts and the world bank as this project progresses. now, in conjunction with development partners, there's also a lot of technical assistance and capacity - building initiatives underway, and some are planned in the region. at times, in the past, these projects have tended to be run in isolation and that's led to