a better understanding of culture and conduct issues in the institutions they supervise. let me conclude. financial institutions have restored their capital, but not public trust. they have repaired their balance sheets, but not their compact with society. they have reformed their systems, but not their culture. only with trust can the financial industry earn the “ social license ” it needs to thrive and grow. to strengthen this trust, we must : ensure that finance is not abused for illicit purposes ; that it places its customers first and deals with them fairly ; and that it fosters a culture of good conduct grounded in strong values and ethics. it is my pleasure now to invite mary to share her views on fostering stronger culture and conduct at financial institutions. 5 / 5 bis central bankers'speeches

as a commonly observed feature, households in japan and the euro area tend to perceive that the present price level represents an increase – except for a short period immediately after the global financial crisis – and they tend to expect higher price levels about one year ahead ( charts 9 and 10 ). moreover, those households commonly tend to expect to spend less in the near future. from these features, it may be said that households plan to reduce their spending about one year ahead because they expect a tighter budget as a result of expected higher prices. a different feature is evident with regard to the relationship between actual price performance and households ’ present price perception ( as well as their one - year - ahead price expectation ). in the euro area, households ’ present price perception and price expectation dis are roughly in line with actual price performance. by contrast, japanese households ’ present price perception ( except for a short period immediately after the global financial crisis ) and price expectation dis remained positive even when mild deflation prevailed from 2009 to mid - 2013. more recently, despite the rate of change in the core cpi having dropped to around 0 percent, the rising trend in the present price perception di has been firm and the relatively high level of price expectation di has been sustained. thus, japanese households ’ price perceptions and expectations constantly differ from the movements of official price statistics. on this front, it is known that japanese households ’ price perceptions and expectations are heavily affected by the price movements of daily necessities and gasoline, resulting in an upward bias. this could be interpreted as a sign of a strong defensive action against the anticipated tighter budget. if so, households may perceive a rate of actual inflation of much higher than 2 percent in the process of approaching the 2 percent target, and regard such price rises as unacceptable. thus, it is important for the boj to promote public understanding that its objective is to achieve a moderate price rise and a sustainable increase in household spending. additionally, households ’ tolerance for price rises needs to improve in accordance with a sustainable income rise. d. euro area firms ’ price expectations becoming comparable with those of japan with respect to firms ’ price expectations, the sales price expectation di for three months ahead is available from the boj ’ s tankan ( short - term economic survey of enterprises in japan ) and the european commission ’ s surveys ( chart 11 ). one interesting finding is that in japan, firms ’ sales price expectation di has fluctuated in negative territory since the first half of the 1990s, when