Since, in a cross-border resolution of a G-SIB, it is in the interests of both home and host resolution authorities that key subsidiaries that are not themselves resolution entities do not formally enter resolution, and instead resolution tools are applied only to resolution entities, this will incentivise cooperation between home and host and reduce incentives to ringfence assets locally in an uncooperative manner. So, if there is sufficient GLAC of adequate quality that is distributed appropriately within G-SIB groups, we will have made a further, major step in making G-SIBs resolvable and ending TBTF. Again, let me emphasise the importance of disclosure at the legal entity level. It is important that investors in GLAC, and creditors of G-SIBs generally, can identify their place in the creditor hierarchy and therefore better estimate their expected losses should resolution become necessary. This will reduce moral hazard, improve certainty of outcomes in the event of failure, and so incentivise investors to ensure the firms they are investing in are run in a prudent manner. Conclusion I want to emphasise just how much progress has been made in last three years: resolution regimes and authorities are now in place where there were none previously in many countries. Resolution planning for systemic banks is taking place in Crisis Management Groups and will soon be taking place in EU resolution colleges too. We look forward to the guidance and technical standards from the European Banking Authority on how resolutions will be transacted.
This cluster, accounting for 17% of GDP, comprises retail and food services as well as construction activities. The real estate and retail segments will be weighed down by subdued consumer sentiment and the shift to overseas retailers via e-commerce. Public construction will be supported by infrastructure projects, such as the ongoing extensions to the rail network, but private construction is likely to remain subdued. Inflation has come in within expectations. Both core and headline inflation are on a modest uptrend but underlying price pressures remain benign. MAS Core Inflation is projected to average 1-2% in 2017, up from 0.9% in 2016. The rise in core inflation since Q4 2016 has largely reflected higher prices of oil-related items. Domestic sources of inflation remain contained partly because the pass-through of business costs to consumer prices has been quite weak. CPI-All Items inflation is expected to come in at 0.5-1.5%, up from −0.5% last year. Accommodation cost will likely continue to exert a drag on headline inflation Generalised demand-induced price pressures have been relatively muted for some time. But MAS is closely watching developments for the rest of this year, especially if upside risks to GDP growth materialise. MONETARY POLICY The current neutral stance of monetary policy has helped to stem disinflation pressures in the economy. MAS has adopted a 0% p.a. appreciation path for the $ policy band since April 2016. This neutral stance has facilitated a turnaround in headline CPI inflation, which had been negative for 24 consecutive months.