the private sector is estimated to have risen by about two years to around 61. working life will have to be extended, partly to guarantee an adequate standard of living to the older people of tomorrow. the countries in europe with the highest employment rate in the 55 – 64 age group are also those with the highest youth employment. in 2009 the government took an important step by automatically establishing a link, from 2015, between the minimum retirement age and changes in life expectancy ; a regulation now being drafted will implement this provision. actions on the so - called retirement “ windows ” and on regulations for women employed in the public sector move in the same direction. inps has launched initiatives to give better information to workers about their personal pension position. the process of pension system reform could be completed by measures that gradually standardize the retirement age among different groups of workers, speed up adjustments to the transformation coefficients of the contributions - based system, and provide greater retirement flexibility. banks, supervision lending to firms declined by 3. 7 per cent on an annual basis between september and december 2009. in 2010 the pace of the contraction eased and in the three months ending in april came to 1 per cent. the sharpest decline has been in northern italy, where industrial activity is most intensive ; lending to firms in the south has begun to grow again. credit to households has continued to expand, albeit slowly. last year ’ s credit contraction largely reflected the weakness of demand for loans, but there were also supply - side tensions. according to the eurosystem ’ s bank lending survey, these gradually eased from mid - 2009 onwards. we recently conducted the survey at regional level, expanding the sample ; the results indicate improving supply conditions in the early months of this year in the north - west and the south. in italy, as in other countries, the quality of bank loans deteriorates during recession. in 2009 the loan losses of our five largest banking groups absorbed almost 70 per cent of their operating results ; their profits fell by over a fifth. the trend, though moderating in early 2010, has continued and is affecting smaller lenders too, who were less badly hit in the early stages of the crisis. with the onset of the greek crisis, acute liquidity strains in the interbank market have returned after subsiding last year. transactions are mostly very short term. there is a large share of collateralized contracts, a tendency to deal with domestic counterparties and frequent recourse to bilateral trades. banks must be prepared

remains below 2 per cent. the substantial slackening that we continue to observe in the intensive margin of labour utilisation – in the third quarter of 2021 hours per worker were still almost 2 per cent less than on the eve of the pandemic – and the low level of vacancy rates – which does not suggest any potential signal of a mismatch between the supply and demand of labour – have not pointed so far to the possibility of a worryingly persistent acceleration of nominal wages. it goes without saying that this is a factor whose evolution will have to be closely monitored. the third factor concerns inflation expectations. in the us, longer - term expectations ( beyond five years ) do not show clear signs of a de - anchoring, providing an encouraging perspective on the possibility, for the fed, of bringing actual inflation down without implementing surprising and abrupt changes in the monetary stance, which could trigger a recession ( figure 6 ). in the euro area, the process of the gradual re - anchoring of longer - term expectations from the lows observed in the last few years is being completed, even if a relatively large percentage of analysts continues to predict inflation to be somewhat below our 2 per cent ( symmetric ) target in five years. given these developments – while in the us the federal open market committee decided it wise to quickly reduce asset purchases and implemented an effective line of communication aimed at preparing the public for the lift - off of the target range for the federal funds rate – in the euro area a gradual normalisation of monetary policy was deemed to be the most appropriate stance. from the evidence that i have briefly summarised, i strongly believe that monetary policy in the euro area has not been behind the curve. indeed, i would venture to say that the re - anchoring of inflation expectations, after a rather long period during which the ecb has successfully countered material deflationary risks, also bears witness to the success of the new monetary policy strategy completed in july of last year. and there is certainly good reason to believe that, given wage prospects and the state of expectations, headline inflation will progressively converge to 2 per cent as the serious disturbances generated by the dramatic evolution of the russia - ukraine war fade away. the rise in energy prices ( which has also been accompanied by price increases of other commodities, most prominently food ) is, in fact, a clear and unexpected supply - side shock, one that may admittedly last for some time. in addition, as i have observed, it is likely