expenses. to provide a more nuanced picture of this, i shall go on to discuss what lies behind our inflation forecast and why underlying inflation is high at present. it is important to begin with how we view the global economy and swedish economy today in order to give a clear picture. brighter prospects for the global economy the terrorist attacks on 11 september increased uncertainty over how the already weak global economy would develop. investments were postponed in the face of a possibility of escalating antiterrorist measures of unknown scope and consequences. there was also the risk of a considerable slowdown in consumption. many central banks around the world cut their instrumental rates to counteract a feared decline in demand. the riksbank cut its repo rate by 0. 5 percentage points, to 3. 75 per cent. now, just over six months later, we can conclude that the impact of the attacks on the global economy was less than feared, although certain sectors were hard hit. in addition, there are more and more signs of an imminent improvement in activity in both the usa and europe. the stocks that had been built up during the downturn in activity appear to have been largely phased out and according to a number of indicators, production has begun to increase. a cautious optimism has begun to spread. there is also the additional impetus that comes from the expansionary economic policy in many countries and strengthens confidence in an impending upturn. however, for the global recovery to really take off and become stronger, it is necessary that it is accompanied by a broad and sustained increase in demand. if production increases because stocks are too small and need to be refilled, there is a risk that the upturn will be short - lived. we have been receiving both positive and negative signals regarding the situation in the us economy. the positive signals come from an unusually strong growth in productivity during the slowdown in activity, which indicates that the us industry has managed to adapt its production structure in an impressive manner. private consumption, which is important in all countries, but particularly in the usa, has also remained strong during the whole of 2001 and early 2002. negative signals are coming from manufacturing, where companies'profit expectations are subdued in both the usa and europe. however, the first reports just presented for q1 look better than the market had expected. although as private consumption has been relatively strong in the usa, there is no pent - up need to purchase capital goods as is usually the case after an economic downturn

andreas dombret : the cake's getting smaller. consolidation and reorientation in the german banking sector speech by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the frankfurt school of finance & amp ; management's fifth annual conference on integrated performance and risk management, frankfurt am main, 30 march 2017. * * * 1 introduction ladies and gentlemen thank you for inviting me to speak at this conference on integrated performance and risk management. the close ties between the deutsche bundesbank and the frankfurt school of finance & management have already become something of a tradition, and i hold them in high regard. the speech i am holding today is entitled “ the cake ’ s getting smaller – consolidation and reorientation in the german banking sector ", and you may be wondering what managing a credit institution has in common with this city ’ s famous cake, the frankfurter kranz … well, both are crowning achievements in their respective professions : the frankfurter kranz, invented here in frankfurt am main in 1735 by an unknown baker, is part and parcel of this city ’ s history in the 18th century. shaped like a wreath – kranz in german – it symbolises the emperor ’ s crown. unsurprisingly, then, it takes a great deal of skill and craftsmanship to prepare. similarly, managing a credit institution has emerged as one of the elite disciplines in the business world. steering an institution, with all the tasks that entails, has become far more gruelling in recent years – not just because market conditions have become harsher, but also because the cake that can be divided up in the first place has shrunk in size and is continuing to do so. and when the going gets tough, there ’ s no option but to tweak the recipes. 2 the cake ’ s getting smaller the cake that can be divided up among germany ’ s banks and savings banks has been shrinking for many years now. just look at how earnings have been contracting for more than 15 years – the figure for 2015 is nearly 30 % down on 1999. this malaise can be traced back to a number of factors. one is that europe, and germany especially, are often lambasted for being “ overbanked ". unless these overcapacities are reduced, they will continue to take their toll on earnings. the low - interest - rate environment is having much the same effect. we are already