##demic level of real wages within the projection horizon, with the rates of wage inflation in 2024 and 2025 well ahead of the rates of price inflation. it will be well into the new year before the area - wide 2024 wage trends become fully visible : this fundamental source of uncertainty will not be resolved any time soon. in turn, the next phase in wage adjustment will also depend on the extent to which labour demand is affected by the slowdown in economic activity. in particular, the dampening of activity levels and the increase in financing costs might lower the propensity to hoard labour. the contribution of unit profits to annual inflation in the first half of 2023 has moderated relative to its contribution in 2022, suggesting that the rising wage pressures are starting to be absorbed by firms. price hikes coming in below the increase in unit labour costs are projected to contribute further to the required disinflation during 2024. in parallel to the drawn - out nature of the wage adjustment process, the actual contribution of profit moderation to disinflation will only be uncovered over a number of quarters. 5 / 6 bis - central bankers'speeches in terms of the policy response, our restrictive monetary policy stance is providing considerable support to the required disinflation dynamics. in particular, the stagnation of activity levels during 2023 and the associated higher level of slack in the economy means that firms will be more cautious in seeking outsized price hikes and more reluctant to grant excessive wage increases. in related fashion, any new cost - push shocks are less likely to be amplified under demand - constrained conditions, with such shocks more likely to dent the real value of both profits and wages, rather than being fully passed through to consumer prices. at the same time, we will continue to monitor the strength of monetary policy transmission, in view of the state - contingent impact of monetary policy tightening on financing conditions, the real economy and inflation dynamics. these considerations suggest that we still have ahead of us an extended phase of uncertainty about the disinflation process. given the scale of the initial inflation shock, the lagged nature of wage adjustment in the euro area, the considerable sectoral rebalancing that is underway and the extent of uncertainty about transmission lags and the strength of the monetary policy transmission mechanism, it is hardly surprising that inflation uncertainty will not be quickly resolved. 1 for more extensive discussions of the nature of the shock, see lane, p. r. (

have just described, the snb continues to take the view that targeted mortgage loan - related measures are necessary in the residential investment property segment. the snb supports the federal council ’ s proposal to raise the capital requirements for highltv loans in this segment. specifically, this would involve increasing the risk weights for loan tranches exceeding two - thirds of the residential investment property ’ s value. the snb welcomes the swiss bankers association ’ s readiness to consider a revision to the selfregulation guidelines as an alternative to the federal council ’ s proposal. such a revision would reduce the ltv ratio and shorten the amortisation period for new loans financing residential investment property. in the snb ’ s assessment, the domestically focused banks hold sufficient capital to cover their risk exposure. despite a fall in profitability in 2018 as a result of a further reduction in interest margins, they have been able to maintain their capital situation. snb stress tests continue to suggest that most of these banks have a sound capital base, enabling them to cover any losses they might incur under adverse scenarios. the proposed measures should help to ensure that the level of risks incurred in the mortgage market remains bearable in the future. for its part, the snb will continue to monitor developments on the mortgage and real estate markets closely, and will regularly reassess the need for an adjustment of the countercyclical capital buffer. page 3 / 3