As we see it, it is not the job of the authorities to enforce a kind of a fast-track adjustment towards the future rules in the current European stress testing. Basel III introduces a definition of core tier 1 capital from the beginning of 2013 with an additional transitional period up to 2019. Under the upcoming definition, “silent participations” will no longer be eligible.
On the basis of current futures prices for oil, headline inflation is likely to decrease over the coming months. Measures of underlying inflation remain generally muted, but domestic cost pressures are continuing to strengthen and broaden amid high levels of capacity utilisation and tightening labour markets, which is pushing up wage growth.