, transport companies and financers, among others. news spread very fast through this network. after napoleon's defeat at waterloo, the rothschild family received the news – before the british government! they purchased british government bonds, and when news of the victory arrived, prices rose, making the rothschild family even wealthier. at the core of the family's success was the foresight of mayer rothschild, which led him to conclude a partnership agreement with his sons at an early date. this agreement was aimed at ensuring a strong family - owned business based on the father's solid reputation as a businessman. the family was to benefit from the reputation that mayer rothschild had built up. furthermore, mayer and his sons were to share the profits from the business empire, which meant that they took an interest in each other's affairs and the partnership as such. in other words, the business empire was based on the principle of everyone having something at stake. * * * * * * * * * my other retrospective example relates to a period of around 30 years in mid - 19th century usa. before this period, every single bank in the usa had to have a charter through special legislation for that specific bank. however, this changed when many states began to introduce state charters describing the general requirements to be met by banks that wanted a licence to operate. this period has been called the " free banking " era page 2 of 8 because anyone meeting the relevant state's banking requirements could establish a bank. a bank was typically established by selling shares – " subscriptions " – and by using the funds received to purchase government bonds. if you wanted to operate a bank, you had to deposit government bonds to back the banknotes issued by the bank. the banknotes were used by traders, and there were " banknote reporters " who prepared lists of counterfeits and listed the prices of the various banknotes. later generations have interpreted this period in different ways. a number of banks failed, so initially it was investigated whether they misused their special position, e. g. by having insufficient backing for the banknotes issued. in the literature, these banks were referred to as " wildcat banks ". later, the view of the period changed, and focus is now on market discipline during this period. this was reflected in the market's ability to price the risk on the banknotes from the individual banks, which was of paramount importance to the bank's reputation. there were banks that failed, but

sentiment, although still weak, responding to the announcement of the comprehensive plan for financial revitalization, the so - called total plan, and to the emergence of expectations for permanent tax cut. in money markets, with the heightened awareness toward financial problems at a bank, concerns over credit risks of financial institutions strengthened once again, and upward pressure on interest rates suddenly mounted toward the end of june. however, with the ample provision of funds by the bank of japan and the announcement of the total plan, market anxieties settled down, and the upward pressure on interest rates gradually eased. with respect to monetary aggregates, growth in m2 + cds has been slowing, reflecting the sluggish private bank lending. these developments appear to strongly reflect the further decline in credit this report was written based on data and information available when the bank of japan monetary policy meeting was held on july 16, 1998. the bank ’ s view on recent economic and financial developments, determined by the policy board at the monetary policy meeting held on july 16, as the basis of monetary policy decisions. - 2demand of private firms with the worsening of overall economic activities, and the continued cautious attitudes of private banks in extending loans. meanwhile, some firms, especially small and medium - sized firms, have been facing difficult financing conditions in terms of both funds availability and fund - raising costs. this influence on the overall economy continues to warrant careful monitoring.