Our objective should be to set capital and other prudential requirements for large banking firms at a level that protects financial stability and maximizes long-term, through-the-cycle credit availability and economic growth. To accomplish that goal, it is essential that we protect the core elements of these reforms for our most systemic firms in capital and liquidity, stress testing and resolution.
2 My own view is that I do not see signs of a disconnection between inflation and unemployment in the data for the euro area. There are three observations that lead me to this position. First, various estimates of the euro area Phillips curve slope show that while the slope has varied over time, in recent years it has steepened (see Chart 1).