contrast between the lack of resilience of pre - crisis financing and more recent trends is most stark when looking at the distribution of lending. let me give you some headline metrics. almost half of new mortgages issued between 20047 were originated at a loan to income multiple greater than four. the equivalent share over the past four years has been around 6 %. so new borrowers now have lower level of indebtedness relative to incomes, providing greater cushions against risks to affordability due to – for example – shocks to interest rates or inflation. similarly, close to 1 in 3 new mortgages issued in the period between 2004 - 7 were originated with loan - to - value ratios greater than 90 %. by contrast, over the past four years the equivalent share has been less 0. 5 %. so new borrowers now have higher levels of housing equity, providing greater cushions against the risk of house price falls. the central bank ’ s macroprudential mortgage measures – our limits on how much people can borrow relative to their income, and how much of a deposit people must put down when purchasing a home – have played a key role in delivering that outcome. these measures – introduced in 2015 – were our first macroprudential intervention. they have guarded against a return to the fragilities in mortgage financing that we saw before the financial crisis. what does this mean in practice and why does it matter? first, the resilience of both borrowers and lenders has strengthened. we can see this, for example, in the distribution of actual defaults in recent years. even now, fifteen years on from the onset of the financial crisis, mortgages issued before the crash still account for around 85 % of the flow of new defaults. the vulnerability of mortgagors that borrowed under unsustainably loose lending standards before the financial crisis remains evident today, while new borrowers – including those that borrower under the mortgage measures – have displayed greater resilience. the second implication of this more sustainable form of mortgage financing is that we have seen less of an amplification between house prices and credit than in the past. put differently, we have not had a repeat of the extreme patterns of credit chasing house prices and vice versa. of course, it is not possible to say with certainty how the economy would have evolved in the absence of the mortgage measures. still, our assessment is that the measures have been effective in limiting a credit - fuelled house price

of firms, % firms cautious about changing output prices ( 20 % ) other firms ( 80 % ) - 10 - 20 - 30 - 40 cy 07 less than 1 yr. note : figures are for all industries and enterprises in the tankan survey. figures for " firms cautious about changing output prices " are for firms that replied that their output prices were " unchanged " for at least about 95 percent of the period from 1991 to 2019. the dotted lines represent forecasts from the september 2022 survey. source : ikeda, s. et al., " firms'recent price - setting stance : evidence from the tankan, " bank of japan review series, no. 23 - e - 2 ( february 2023 ), https : / / www. boj. or. jp / en / research / wps _ rev / rev _ 2023 / data / rev23e02. pdf. 1 - 4 yrs. 5 - 9 yrs. 10 - 14 yrs. 15 - 19 yrs. 20 - 24 yrs. 25 - 29 30 yrs. yrs. and over note : the panel shows the distribution of firms that responded that they had raised their output prices since the september 2021 tankan survey in terms of the number of years that had passed until the first price rise since that survey from the previous price rise. firms are selected on the basis of being " cautious about changing output prices, " having replied that their output prices were " unchanged " for at least about 95 percent of the period from 1991 to 2019. source : ikeda, s. et al., " firms'recent price - setting stance : evidence from the tankan, " bank of japan review series, no. 23 - e - 2 ( february 2023 ), https : / / www. boj. or. jp / en / research / wps _ rev / rev _ 2023 / data / rev23e02. pdf. chart 11 consumer prices di of price changes measures of core inflation % points - 10 - 20 - 30 - 40 - 50 - 60 - 70 - 80 cy 07 % di ( left scale ) share of increasing items ( right scale ) share of decreasing items ( right scale ) 3. 5 3. 0 note : the diffusion index ( di ) is defined as the share of increasing items minus the share of decreasing items. the share of increasing / decreasing items is the share of items for which price indices increased / decreased