The Federal Reserve has approached the post-crisis regulatory and supervisory reforms with that outcome in mind. There is little doubt that the U.S. financial system is stronger today than it was a decade ago. Loss-absorbing capacity among banks is substantially higher as a result of both regulatory requirements and stress testing exercises.
In this regard, part of the differences in price developments may stem then from differences in wage developments, including inertial components of wage-setting rules, such as those caused by automatic indexation clauses of wages to prices, which exist in some euro area countries.