Activity has picked up in Central European countries, and the Swedish labour market has become tighter. Therefore, it is uncertain how large the supply of labour from these countries will be in the period ahead. Household debt has risen sharply since the mid-1990s. At the same time, house prices have increased markedly. To some extent, developments in the 1990s can probably be viewed as a delayed adaptation to the deregulation of the housing and credit markets in the 1980s, after many households burned their fingers in the wake of deregulation. In recent years, household income growth has been solid and household confidence in the future is very high. Coupled with expectations of low real interest rate over time, this may have provided an additional boost to house prices. Long periods of sharply rising asset prices and debt may be a potential source of subsequent instability in output and employment. The sharp rise in house prices and debt in other countries are probably also ascribable to low real interest rates over time. Household debt is high in Norway, but is even higher in Denmark and the Netherlands. This probably reflects a long history of well developed mortgage financing in these countries. Inflation stabilised early in the 1990s after falling from a high level in the previous decade. Through the 1990s, inflation generally remained in the interval 1½ – 3½ per cent. Inflation has varied slightly more in the past few years.
BIS central bankers’ speeches  1  •  Doing so, without recourse to public funds. What this implies for the size of MREL and TLAC is the same. Resources should be sufficient to support the continuation of critical economic functions at the point of resolution. Based on an assumption that going concern capital is eroded on the way in to resolution, this implies that there is sufficient loss absorbency to convert to equity capital to stabilise the firm. Stabilisation for this purpose means having resources available to allow the firm to be reauthorised by all relevant home and host supervisors and to maintain market access. All of these factors are set out in the EBA’s technical standard. The same considerations are described in the principles that cover the FSB Term Sheet. It is worth pausing to unpack what this is likely to mean for different sorts of firm and different group structures. Certainly for G-SIBs, the assumption lying behind the calibration of TLAC is that given the size and complexity of their operations and their activities cross-border it is hard to conceive of a significant restructuring at the point of resolution. Rather the accent is on stabilising the firm via bail-in 2 to restore solvency to buy time for an orderly restructuring and/or a solvent wind-down afterwards. This should be good for the system and, by preserving value, for creditors of the firm. By contrast, a very small bank may need no MREL beyond its current capital requirements.