trend. housing investment is likely to continue to trend moderately upward, supported by the improvement in household income and the view that interest rates will only rise from current levels, as land prices are starting to rise particularly in major metropolitan areas. increases in household spending will feed back to the corporate sector via increases in sales and profits, and thus, a virtuous circle between the household and corporate sectors is likely to keep operating. the second element is that there is likely to be a cyclical slowdown in the economic growth rate as the recovery has already lasted for over four years and is likely to mature. given the high level of corporate profits and the expansion in domestic and external demand, the momentum driving increases in business fixed investment is likely to be maintained. however, considering that there is a stable relationship in the long term between the capital stock and aggregate demand, the pace of increase in business fixed investment will probably slow eventually. business fixed investment has steadily increased for the third consecutive year since fiscal 2003, and this has resulted in high growth in the capital stock relative to the projected increase in aggregate demand. therefore, unless firms can make stronger forecasts for the economic growth rate and the rate of return on investment, it is becoming unlikely that they will keep up the current pace of increase in business fixed investment. in this situation, the growth rate of japan's economy is likely to slow toward the potential growth rate, which the bank estimates to be in the 1. 5 - 2 percent range. the forecast is around 2. 5 percent for fiscal 2006 and around 2 percent for fiscal 2007. the third element is that, as the economic recovery matures, a slowdown in the growth in productivity and upward pressure on wages are expected to exert upward pressure on prices. at an early stage of economic recovery, firms usually retain surplus labor and capacity and are therefore able to increase productivity by raising their rate of resource utilization. with the maturing of the economic recovery, however, firms have less scope to increase productivity in this way. as i have already explained, the output gap has closed, and as the economy is likely to continue expanding at a pace above its potential through fiscal 2007, the output gap is likely to become positive and then to widen moderately. moreover, in a situation of improving labor market conditions and with labor shortages being observed in a relatively wide range of industries, wages are likely to continue rising moderately. the rise in wages and the slowdown in the growth in productivity will together put upward pressure

christine lagarde : welcome address - tenth anniversary of the single supervisory mechanism welcome address by ms christine lagarde, president of the european central bank, at the event celebrating the tenth anniversary of the single supervisory mechanism, frankfurt am main, 6 november 2024. * * * it is a pleasure to welcome you to this event celebrating the tenth anniversary of the single supervisory mechanism ( ssm ). the ssm became operational ten years ago, almost to the day, on 4 november 2014. it was the most significant step forward in european integration since the introduction of the euro. if we think back to how the banking sector was faring a decade ago, we can see just how much has changed. the euro crisis had exposed significant weaknesses : low equity buffers, high levels of non - performing loans and deep exposures to domestic sovereigns. our challenge, as daniele nouy said at the time, was to " help rebuild confidence in the balance sheets of ssm area banks " amid a fragmented supervisory landscape. 1 today, however, the situation is vastly different. despite the major shocks that have hit the euro area in recent years, our banking sector is resilient. the aggregate common equity tier 1 ( cet1 ) ratio rose from 12. 7 % in 2015 to 15. 8 % in mid - 2024, while the liquidity coverage ratio increased from 138 % to 159 % over the same period. the main risks we face today no longer stem from the banks themselves, but from an increasingly volatile external environment. and single supervision allows us to address these risks through a common, forward - looking approach. so, have we achieved the initial aims of this single supervision? the achievements of single supervision if we consider the tumultuous events of the past few years, it is clear that european supervision has exceeded expectations. european banks have become considerably more resilient, providing critical stabilisation during the recent periods of disruption. in essence, european supervision has successfully addressed what herman van rompuy identified in 2012 as the need to " correct the weakness of the policy infrastructure of the common currency ". 2 1 / 4 bis - central bankers'speeches first, more rigorous and more uniform supervision has bolstered public confidence, ensuring that bank deposits are seen as equally safe across the euro area, thereby preserving the integrity of our monetary union. since the start of single supervision, household's cross - border deposits have more than doubled to €151 billion today.