success of the vaccination campaigns in europe, which have allowed a significant reopening of the economy. with the lifting of restrictions, the services sector is benefiting from people returning to shops and restaurants and from the rebound in travel and tourism. manufacturing is performing strongly, even though production continues to be held back by shortages of materials and equipment. the spread of the delta variant has so far not required lockdown measures to be reimposed. but it could slow the recovery in global trade and the full reopening of the economy. consumer spending is increasing, although consumers remain somewhat cautious in the light of the pandemic developments. the labour market is also improving rapidly, which holds out the prospect of higher incomes and greater spending. unemployment is declining and the number of people in job retention schemes has fallen by about 28 million from the peak last year. the 1 / 3 bis central bankers'speeches recovery in domestic and global demand is further boosting optimism among firms, which is supporting business investment. at the same time, there remains some way to go before the damage to the economy caused by the pandemic is overcome. there are still more than two million fewer people employed than before the pandemic, especially among the younger and lower skilled. the number of workers in job retention schemes also remains substantial. to support the recovery, ambitious, targeted and coordinated fiscal policy should continue to complement monetary policy. in particular, the next generation eu programme will help ensure a stronger and uniform recovery across euro area countries. it will also accelerate the green and digital transitions, support structural reforms and lift long - term growth. we expect the economy to rebound firmly over the medium term. our new staff projections foresee annual real gdp growth at 5. 0 per cent in 2021, 4. 6 per cent in 2022 and 2. 1 per cent in 2023. compared with our june staff projections, the outlook has improved for 2021 and is broadly unchanged for 2022 and 2023. inflation inflation increased to 3. 0 per cent in august. we expect inflation to rise further this autumn but to decline next year. this temporary upswing in inflation mainly reflects the strong increase in oil prices since around the middle of last year, the reversal of the temporary vat reduction in germany, delayed summer sales in 2020 and cost pressures that stem from temporary shortages of materials and equipment. in the course of 2022 these factors should ease or will fall out of the year - on - year inflation calculation. underlying

erkki liikanen : banking structure and monetary policy – what have we learned in the last 20 years? presentation by mr erkki liikanen, governor of the bank of finland and chairman of the highlevel expert group on the structure of the eu banking sector, at the conference “ twenty years of transition – experiences and challenges ”, arranged by the national bank of slovakia, bratislava, 3 may 2013. * * * how is today ’ s perspective on monetary policy different from what prevailed 20 years ago? twenty years ago, the world of today was being formed in many ways. 1993 was the year when the economic and monetary union project was becoming political reality : the maastricht treaty had been signed and was in the process of being ratified. it was also the time when the mainstream approach to monetary policy was beginning to converge to the flexible inflation targeting framework. a number of countries had then just adopted an explicit inflation targeting strategy. in the sphere of banking regulation, too, a new era was beginning. a significant reorientation was going on, away from regulating the conduct of banks and towards the new risk - based approach. the regulatory trend, based on increased freedom for banks but subject to riskbased capital requirements, would continue all the way to the eruption of the financial crisis in 2008. in the eu, the second banking directive took effect from the beginning of 1993, creating a single market in banking. the directive sought to prevent discrimination and to increase efficiency through competition. there was discussion on the implications of this for supervision, but little action. so, while european banking markets were being integrated, financial supervision remained a national competence. in the u. s., deregulation was also moving forward. for instance the glass - steagall act, separating banking from securities and insurance, was under growing criticism and would be ultimately repealed in 1995. one reason for the dissatisfaction with the glass - steagall system in the us was competition from european banks which were less restricted in what they could do. twenty years ago, the striking improvement in macroeconomic performance, later named “ the great moderation ” by chairman bernanke, was spreading to the whole developed world. the almost surprising success of monetary policy in improving price stability and reducing fluctuations in economic activity, while also keeping interest rates at historically low levels, was interpreted as a major victory for the art of economic policy making. now we know that there was trouble brewing under the surface. the underpinnings of