Turning to consumer prices, Eurostat’s flash estimate for annual HICP inflation was 2.1% in March, unchanged from February. In the coming months, annual inflation rates are likely to remain somewhat above 2%, although the exact figure will depend largely on how oil prices develop.
In Japan, the required adjustment remains particularly challenging, while the US would benefit from long-term financial reforms. Banking sector policies must ensure that the sector is well-capitalized and that balance sheets are strong. This is especially important for the euro area’s bank-based financial system. With the first steps towards a banking union and the recapitalization measures already implemented, a lot has been done.