At the same time, we need to establish a common backstop to the Single Resolution Fund and lay the groundwork for the creation of an effective European Deposit Insurance Scheme. Significant steps in these areas are a precondition for a truly integrated euro area banking system and single money. The transmission of the ECB’s monetary policy remains at risk of being hampered in crisis situations as long as levels of depositor confidence differ across the euro area. The second thing we need to do is build a true single market in capital. Diversified capital markets play an important role in sharing risks and smoothing private consumption over time. For this reason, the ECB has been a strong supporter of the European Commission’s plan for a capital markets union. To be robust, the capital markets union needs effective regulation and supervision, for example in relation to investment firms and clearing. Not least given the United Kingdom’s imminent departure from the EU, we need to make concrete progress on this agenda and complement it with an ambitious, longer-term vision. Conclusions I would like to end by mentioning that recent Eurobarometer data show that support for the euro stands at a record high of 77% among euro area citizens and a large majority believe that their country’s membership of the EU is a good thing. Support for the European project is particularly strong in Ireland, where with 88% of citizens the single currency enjoys the highest level of support in the EU. Europe has to repay this trust.
My view has been that the further appreciation of the Swedish krona has risked leading to impaired target fulfilment, and this has been the motivation behind my stance in favour of a lower repo rate path than that decided upon. Am I not concerned that a lower repo rate path would lead to excessive inflation, considering how inflation has increased recently due to higher energy and commodity prices? It remains to be seen how permanent these increases will be. In our most recent forecast, which assumed the stabilisation of these prices, underlying inflation, even in the main scenario, was estimated at less than 2 per cent for most of the forecast period (see Figure 2). On the basis of this forecast, there is thus scope for a more expansionary monetary policy. One matter that I intend to address at the next monetary policy decision is the wide gap between CPI inflation and CPIF inflation that we saw in January and February. This gap is partly due to a detail, related to mortgage costs, in the calculation method used, which also results in higher CPI inflation over the rest of the year than was forecast in the monetary policy report in February. However, in my opinion, the underlying inflationary pressure in the economy is still low, which, for example, is reflected by the low outcome for CPIF inflation. 2  BIS central bankers’ speeches  Monetary policy has to be forward-looking, as its influence on the economy is subject to a time-lag.