##pricing of risks. in some cases, particularly in periods of increasing stress in the financial system, they may be unwilling to deal with certain firms altogether. parties who have short - term lending to, or contractual arrangements with, these firms may “ run ” as those loans or contracts lapse, thereby potentially crippling the ongoing business of the firm and creating adverse effects in other parts of the financial system. a second reason is, in some sense, the converse of the first. if creditors and counterparties do not believe the fdic can successfully resolve the firm, they may not price in the potential for losses that should be incorporated in their dealings with large firms. that is, if investors and other market actors think the prospects for orderly resolution seem low, they may assume the firm will be rescued by the government, and any moral hazard present in these markets will continue. by specifying which financial obligations will be maintained and where the fdic will look to impose losses, a well - developed approach to resolution can create incentives for private action compatible with the overall aims of systemic firm resolution. the fdic has made great progress in implementing title ii, in particular by developing the single - point - of - entry approach to resolution of a systemic financial firm. under the singlepoint - of - entry approach, the fdic will be appointed receiver of only the top - tier parent holding company of the failed firm. after the parent holding company is placed into receivership, the fdic will transfer assets of the parent company to a bridge holding company. the firm ’ s operating subsidiaries ( foreign and domestic ) will remain open for business as usual. to the extent necessary, the fdic will then use available parent holding company assets to recapitalize the firm ’ s critical operating subsidiaries. equity claims of the failed parent company ’ s shareholders will effectively be wiped out, and claims of its unsecured debtholders will be written down as necessary to reflect any losses or other resolution costs in the receivership. the fdic will ultimately exchange the remaining claims of unsecured creditors of the parent for equity or debt claims of the bridge holding company and return the restructured firm back to private sector control. this conceptual approach to resolution under title ii represents an important step toward ending the market perception that any u. s. financial firm is too big or too complex to be allowed to fail. 5 the aim of the single - point - of - entry approach is to stabilize the failed firm quickly, in order

such fluctuations, when we compare real gdp in the january - june period this year with that in the july - december period last year, the annualized growth rate was 1. 0 percent. therefore, on average, japan ’ s economy has continued to grow at a pace above its potential. more specifically, the employment and income situation has continued to improve steadily, and household sentiment has been improving, although the decline following the front - loaded increase prior to the consumption tax hike is still observed, and exports as well as industrial production have shown some weakness. moreover, firms have maintained a proactive stance on investment due mainly to their favorable business performance. in this way, a virtuous cycle from income to spending has been operating steadily in both the household and corporate sectors. with this mechanism intact, japan ’ s economy is expected to continue its moderate recovery trend, and the effects of the decline in demand following the front - loaded increase are expected to wane gradually. next i will discuss the household and corporate sectors, respectively. bis central bankers ’ speeches household sector : resilient private consumption in the household sector, private consumption has remained resilient as a trend with the employment and income situation improving steadily. with regard to durable goods such as automobiles and household electrical appliances, the recovery from the decline has dragged on reflecting the large degree of front - loading of purchases. on the other hand, sales at department stores and supermarkets have followed a recovery trend on average. moreover, consumption of services has been resilient, as seen for example in food service and outlays for travel, where the effects of the consumption tax hike have been limited. although developments in consumption after the consumption tax hike vary by item and bad weather may have adversely affected developments in some regions, the effects of the decline in demand following the tax hike have gradually begun to wane on the whole. looking ahead, with the employment and income situation continuing to improve steadily, private consumption is expected to remain resilient. with regard to the household sector, it is claimed that wage increases have failed to keep pace with inflation and real wages have declined, putting downward pressure on private consumption. on this point, it is important to distinguish between an increase in the inflation rate resulting from the consumption tax hike and trend inflation. with the year - on - year rate of increase in the cpi since april this year having been pushed up temporarily due to the consumption tax hike, the year - on - year rate of increase in nominal wages