In view of the direct and indirect effects of these developments, we revised the end-2015 inflation forecast down by 0.6 percentage points compared to the previous reporting period. In food prices, we left the end-2015 inflation forecast unchanged at 9 percent. Our medium-term projections are based on the assumption that tax adjustments and administered prices are consistent with inflation targets and automatic pricing mechanisms. The medium-term fiscal policy stance is based on the Medium Term Program projections covering the 2015–2017 period. Accordingly, we assume that a tight fiscal stance will be implemented and the primary expenditures to the GDP ratio will decrease gradually. 3. Inflation and the monetary policy outlook  Now, I would like to present our inflation and output gap forecasts based on the outlook I have described so far. Our medium-term forecasts are based on a framework that we will adopt a cautious approach to make the improvement in inflation outlook permanent and maintain the tight monetary policy stance by keeping the yield curve flat. Moreover, we assess that the annual loan growth rate will stabilize around the recent reasonable levels, also thanks to the macroprudential measures. Accordingly, we expect inflation to be, with 70 percent probability, between 4.1 percent and 6.9 percent (with a mid-point of 5.5 percent) at end2015 and between 3.2 percent and 6.8 percent (with a mid-point of 5 percent) at end-2016. We project inflation to stabilize around 5 percent in the medium term (Chart 18).
Moreover, Credit Suisse and UBS have taken important organisational steps to improve their resolvability as part of their resolution planning. For instance, they have both set up Swiss  1  Final requirements refer to the requirements that will apply after expiry of all transitional provisions. In particular, they concern the qualitative requirements for going-concern capital. Page 1/3  Berne, 13 December 2018 Fritz Zurbrügg  News conference  subsidiaries that contain their systemically important functions, including, in particular, domestic deposit and lending business. To ensure an orderly resolution in a crisis, progress is still needed in three areas in particular. First, FINMA, as the competent authority, is currently in the process of drawing up resolution funding plans. These aim to ensure that a bank has sufficient liquidity to implement a resolution without recourse to state support. Second, it must be ensured that big banks’ lossabsorbing capacity is adequate, not only at group level, but also on a stand-alone basis at the level of the individual group entities. In this context, the Federal Council has announced that, during the first half of 2019, it will decide on the corresponding requirements for the highest operating unit of the big banks – i.e. the parent entity. Third, Credit Suisse and UBS must further reduce the financial and operational dependencies within the group. Domestically focused banks  I would now like to turn to the domestically focused banks. Here too, there has been little change since the Financial Stability Report was published in June.