Increased consumer power and greater competition slow down prices and thereby margins for the companies. The changes are necessary to increase our welfare, even if they create problems for some people in the short term. To manage these challenges, we should jointly strengthen the opportunities for education and skills development, even out some of the gaps arising during the upheavals and safeguard the interests of the general public by strengthening competition on the new markets. In a changing world we need to have clear game rules to ensure the economy functions smoothly. Reliable price stability, in terms of purchasing power, is one such game rule. It makes it easier for individuals and companies to plan for the future, it improves price setting and wage formation and thus contributes to more stable economic activity. So, attaining our inflation target of two per cent will help to accomplish the changeover following on from digitalisation. 10 [12]  References Apel, Mikael, Frohm, Eric, Hokkanen, Jyry, Nyman, Christina and Palmqvist, Stefan (2014), Why haven't companies raised their prices? Results from a survey on company pricing”, Economic Commentaries No. 4, 2014, Sveriges Riksbank. Baumol, J William, Panzar, C John, and Willig, D Robert (1982) “Contestable Markets and the Theory of Industry Structure”, New York: Harcourt Brace Jovanovich, Inc. Brynjolfsson, Erik and McAfee, Andrew (2011) “Race Against The Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy”, New York: W. W. Norton & Company. Cavallo, F Alberto (2017), “Are Online and Offline Prices Similar?
What is, perhaps, most notable is that the supervisory focus was placed on banks’ interest rate risk and the sustainability of their funding plans, issues that are crucial in a context of rising interest rates and liquidity withdrawal by central banks. Also, the most exposed European banks were required to improve the way in which they monitor and manage this risk. In some cases, they were even asked to be more conservative in their interest rate assumptions and in their model calibration and validation. Similarly, when it became apparent that there were interconnections between the banking system and non-bank financial intermediaries, the decision was also made to place the supervisory focus on analysing the risks for European banks of this type of exposure. The EU banking sector is so far benefiting from the ongoing normalisation of interest rates, as the interest rate pass-through on the asset side still significantly exceeds the pass-through on the liability side. Consequently, aggregate banking sector profitability is at its highest level since 2014. However, several factors continue to cloud the outlook for banks. First, the deceleration in economic growth and higher interest rates may have an adverse impact on asset quality, leading to higher impairment costs, and on lending volumes, exerting contractionary pressures on income generation capacity. Second, banks’ funding costs are on the rise, bringing potential pressure on interest margins. The impact of these factors is expected to become more pronounced over time and more likely the longer the high-interest rate period continues.