Three components are now envisaged in the banking union, namely a single supervisory mechanism, a common deposit guarantee regime and a common resolution agency. The first of these is in full active preparation; draft legislation is expected to be complete by the end of 2012 with an implementation phase during 2013. The other two would come later.
We can argue about whether supply or demand is a greater factor, but the details have no bearing on the fact that we are not meeting the FOMC’s price stability mandate. What I care  -4about is getting inflation down so that we avoid a lasting escalation in the public’s expectations of future inflation.