The same menu, consisting of exactly the same brand products, would cost £ today. The food basket has increased in price by a factor of 48. A vacuum cleaner, if you wanted one in 1910, cost £ That is more than 6 years worth of food based on the menu used in the previous example. A vacuum cleaner was an item of such luxury that owners would invite their friends round to ‘Hoover parties’ to show off their prized possession. Over the years, the price of food increased in nominal terms by a factor of 48, but the price of vacuum cleaners stayed roughly the same. Today you can still buy a vacuum cleaner for £ But that is only 47 days of food shopping, rather than 6 years. As vacuum cleaners became cheaper relative to food, people bought more of them - ignoring such change would introduce a substitution bias. If there is any degree of substitutability between products, then rational consumers would have taken account of such changes in relative prices, and the weight of this particular good in the consumption bundle may  BIS Review 68/2002  13  have changed. The overall result of the substitution is that the expenditure share of electrical 6 appliances has not changed much, at least not in the past 50 years.
This project is essential to overcome the problems of fragmentation which still beset European markets and which cause the perception of risk associated with banks’ liability instruments to differ depending on the jurisdiction in which they operate. However, as you know, to ensure that non-viable banks are resolved in the same way in the various Member States of the euro area, it does not suffice to have a set of common regulations; rather, it is necessary to have a single resolution authority to ensure that the regulations are applied uniformly in all countries. Similarly, the financial support needed for orderly bank resolution must be available under similar conditions whenever required. Clearly the lack of a full European resolution mechanism (including uniform rules, a single authority and a common fund) would limit the effectiveness of the single supervisory mechanism. In that case, the single supervisory mechanism would have to resort to a complex system of interaction with the national authorities (which would have to continue using their resources to cover the fiscal effects of the problems of non-viability detected by the supervisor) to ensure financial stability. In this respect the draft legislative proposal submitted by the European Commission (EC) last July for the establishment of a single resolution mechanism is very timely. The EC proposes the creation of a single resolution agency or authority, which would manage a common fund fed by contributions from the industry and ultimately report to the European Commission.