operate. at this year's annual spring labor - management wage negotiations, base pay increases were achieved for a sixth consecutive year. the rate of increase as a whole was at about the same level as last year ; in particular, that for small and medium - sized firms, which are susceptible to labor shortage, turned out to be relatively high. in addition to wages, other costs, such as distribution costs, have continued to increase. in this situation, firms have passed on cost increases to sales prices and such moves gradually have been spreading of late. thus, prices seem to have become more stable recently. let me introduce two examples ( chart 8 ). the first is price rises such as in food products, daily necessities, and services. looking at prices of food products and daily necessities sold at supermarkets, the rates of increase have been accelerating clearly since april. in addition, the positive annual inflation in prices of dining - out and housework - related services among general services has taken hold. the second example is that firms'stance has shifted toward further raising prices, regardless of the firm size. looking at the output prices di of industries related to consumption, which has close relations with the cpi, since around 2017, the proportion of enterprises answering that the output prices have risen has exceeded the proportion of those answering that such prices have fallen, and the gap has expanded gradually. of course, a rise in overall prices is not favorable for households if focusing only on the rise. what is important is that it should accompany improvement in the employment and income situation so that households can accept price rises ( chart 9 ). on this point, employee income, which is calculated as wages per employee multiplied by the number of employees, has continued to increase. this is because nominal wages have increased for the past few years and the positive rate of change in the number of employees has taken hold. thus, the likely reason why prices have become more stable recently is that households'tolerance of price rises has risen, albeit moderately, with the employment and income situation improving. now, i would like to move on to the outlook for prices ( chart 5 ). in the july 2019 outlook report, the medians of the policy board members'forecasts of the year - on - year rate of change in the cpi excluding fresh food are 1. 0 percent for fiscal 2019, 1. 3 percent for fiscal 2020, and 1. 6 percent for fiscal 2021. annual cpi inflation is likely to increase gradually, but

too important to fail. public reaction to the crisis and the need to rebuild trust the huge cost of the financial crisis, both in terms of direct public support to banks and lost economic output has sadly fallen to tax payers, causing an understandable and justified public outcry. trust needs to be rebuilt between banks and the general public, and the role of internationally co - ordinated regulatory reforms is central in this process. also in banking not only gains but also losses must fall on the risk - takers. bis central bankers ’ speeches regulatory response to the crisis the problems in banking, as revealed by the crisis, can be summarized as excessive risktaking, leverage, complexity, inadequate capital, extensive interconnectedness, and very limited possibilities to resolve failed banks. in response to these problems, regulatory reforms have been focused on two crucial areas : capital adequacy and liquidity requirements, as in basel iii, and recovery and resolution, as in the commission ’ s proposal. these reforms can go a long way toward increasing loss absorbency, reducing incentives to take excessive risks and increase leverage, and reducing the social costs of bank failures and the need for implicit public guarantees. the high - level expert group was requested to consider whether there is a need for structural reforms of the eu banking sector or not and to make any relevant proposals as appropriate, with the objective of establishing a stable and efficient banking system serving the needs of citizens, the economy and the internal market. the proposals of the high - level expert group the group recommends a set of five measures that augment and complement the set of regulatory reforms already enacted or proposed by the eu, the basel committee and national governments. 1. proprietary trading and other high risk trading activities should be assigned to a separate legal entity if the activities to be separated amount to a significant share of a bank ’ s business and are above a certain threshold. this would ensure that trading activities beyond the threshold are carried out on a stand - alone basis and separately from the deposit bank. as a consequence, deposits, and the explicit and implicit guarantee they carry, would no longer directly support risky trading activities. the long - standing universal banking model in europe would, however, remain untouched, since the separated activities can be carried out in the same banking group. hence, banks ’ ability to provide a wide range of financial services to their customers would be maintained. within the group, some members expressed a preference for a combination of measures : imposing a non - risk - weighted