Commodity prices, which have a major impact on price developments in Japan, have been on a rising trend, reflecting high growth in emerging economies. As a result, recent import prices have been about 10 percent above year-ago levels, after having plunged more than 30 percent year on year in summer 2009.
This is why functioning resolution regimes are crucial for the financial system reform in Europe. With the introduction of the banking union and the adoption of the BRRD and the SRM, important steps have already been taken in the right direction. However, one critical step is still missing: the establishment of standards for loss-absorbing liabilities, ie debt that can be bailed in.