The unemployment rate, currently standing at 12.1%, remains unacceptably high, and the risks around the outlook continue to be tilted to the downside. In keeping with the broad-based weakness in aggregate demand, underlying price pressures remain subdued as well. Annual euro area headline inflation is projected to reach 1.5% this year, before declining to 1.3% in 2014.
All other commercial banks (except Local Area Banks and RRBs) are encouraged to migrate to Basel II in alignment with them but in any case not later than March 31, 2009. The process of implementation is being monitored on an on-going basis for calibration and fine-tuning.