of the inflation target during this year. it also appears that medium term inflation expectations remain anchored inside the inflation target. although the depreciation of the exchange rate does create challenges for monetary policy because of the adverse impact on inflation, a floating exchange rate acts as a shock absorber and is an important part of the adjustment process in dealing with a deteriorating current account deficit. nevertheless the underlying structural issues remain, which will make it all the more important for south africa to improve its domestic savings performance, as well as to continue to attract sufficient volumes of foreign capital, preferably in the form of direct investment, an area where german companies have been particularly strong. but the importance of germany goes beyond simply looking at our economic ties. there is a lot that we can learn from the german experience. this is particularly the case with respect to labour relations and skills training. much of germany ’ s post war economic success can be attributed to its social market model. while this model is peculiar to germany, there are many lessons for south africa. allow me to expand on three of these aspects – industrial relations, training and investment in continuous competitive enhancements. naturally, these three aspects are mutually reinforcing. germany ’ s industrial relations are characterised by a high degree of cooperation between employer and employee organisations. both workers and firms take a long term view of the economy and both parties recognise the importance of continuously raising productivity. both parties understand the need to share the productivity gains. this allows for an alignment of incentives between workers and employers. at a micro or firm level, there are appropriate mechanisms to resolve disputes early and in a win - win spirit. in south africa, we need to find models that enable earlier dispute resolution in the workplace before labour disputes affect the broader economy. we also need to find ways that enable the work force to have greater knowledge of the financial affairs of the company and sector, while management needs to better appreciate the living and working conditions of their employees. germany has a dual training system with high quality vocational training institutions complementing on - the - job training by firms. in germany, nearly two - thirds of the country ’ s workers are trained through partnerships among companies, technical schools and trade guilds. in 2011, german companies took on and trained nearly 600 000 paid apprentices. the schools provide theoretical lessons on the side, while trade unions help ensure training is standardised. german firms take in young work - seekers and provide a period of training and induction in order to prepare young workers for

, mostly. this is a source of risk. debt capital flows are more prone to a sudden reversal than other capital movements. what is more, debt capital does not cushion enterprises against risk – except when they become insolvent. equity capital, by contrast, absorbs losses and can make businesses more resilient, ultimately strengthening financial stability. the planned capital markets union can help to dismantle barriers that are currently distorting businesses ’ funding structures and the capital flows in the european union. it can improve the conditions for a more efficient distribution of capital and risk alike. stronger growth and deeper integration across the markets for equity capital could be the key to sharing risk more efficiently and, in turn, bolstering the resilience of the financial system. that “ double dividend ” – more growth, and a more stable financial system – is something the capital markets union promises to deliver. bis central bankers ’ speeches