This exceptional liquidity will be provided at long maturity (up to four years) and a guaranteed fixed rate, a clear sign that monetary accommodation should persist for a very long time. Finally, the Eurosystem is actively preparing to buy asset based securities that will help channel monetary accommodation and ease financial conditions to private non financial borrowers, especially SMEs. IV. New communication strategy  As you know, two important decisions were made at the last Governing Council: the frequency of monetary policy meetings will change to a six-week cycle; and starting in January 2015, the ECB intends to publish accounts of its monetary policy discussions. Why these decisions and why now? The starting point is that monetary policy is becoming more complex. This is true for all major central banks. Monetary policy does not only consist anymore in moving interest rates, but also comprises many other non-conventional measures. This makes it more difficult for markets and economic agents to understand the economic rationale behind these complicated sets of decisions. Still it remains crucial for central banks to be able to influence expectations. Indeed, one form of non conventional policy, namely, forward guidance, depends entirely on managing expectations about future interest rates. There are, therefore, important challenges in implementing monetary policy in the post-crisis environment. The response is to place more emphasis on enhanced communication. As you know, the Eurosystem has always put a priority on transparency. We were the first to systematically organise press conferences after our policy meetings.

And following the Big Bang measures, Japanese banks are merging, even across different keiretsu groups, forming two of the world’s largest banking groups.3 There has also been a wave of strategic alliances between Japanese and foreign financial institutions.4  1  2  3 4  The government has nationalised three commercial banks and absorbed three others into the state-owned Krung Thai Bank. Four commercial banks have been sold to foreign investors thus far. Sony, Nissan and NTT have planned to slash 17,000, 21,000 and 20,000 jobs, respectively. Other Japanese corporations such as NEC and Hitachi have also announced large layoff plans. The Daiichi-Kangyo, Fuji and IBJ group, and the Sumitomo-Sakura group. Including Travellers Group and Nikko Securities, Daiichi Kangyo Bank and J P Morgan, and Goldman Sachs and SocGen with IBJ and Nomura. BIS Review 117/1999  2  In Korea, financial sector restructuring is generally on track. Korea took a hands-on approach. The government aggressively bought and disposed of the non-performing loans in the financial system. It pushed for bank recapitalisation. Forced closures, mergers and acquisitions have removed many weak institutions from the financial sector. Korea is also pressing for reform and restructuring of the chaebols. This will take time, effort and political will, as the difficulties with Daewoo show. Restructuring the chaebols involves a wholesale conversion of entrenched social norms and practices. The initial impact is painful for those who depend on the distortions that reforms seek to remove. Benefits are on the other hand more dispersed, less apparent and longer term.