qqe with a negative interest rate. ” at the latest mpm, the bank acknowledged that there were considerable uncertainties over prices going forward, which could be significantly affected by developments in overseas economies and the global financial market and, reflecting this, developments in medium - to long - term inflation expectations. against this background, with a view to achieving the price stability target of 2 percent at the earliest possible time, the bank decided to conduct a comprehensive assessment at the next mpm of the developments in economic activity and prices under “ qqe ” and “ qqe with a negative interest rate ” as well as these policy effects ( chart 6 [ 3 ] ). the bank ’ s staff will prepare for deliberation at the next mpm. let me share with you our thinking and motivation behind this project. since the introduction of qqe in april 2013, japan ’ s economic activity and inflation have improved substantially, and japan ’ s economy is no longer in deflation. there is no doubt that a clear commitment to the price stability target of 2 percent and large - scale monetary easing that underpinned this commitment under qqe have been very effective for japan ’ s economy to move toward getting out of deflation. that said, the price stability target of 2 percent has not been achieved yet, despite unprecedentedly large - scale monetary easing. with this in mind, we would like to re - examine the transmission mechanism of policy effects and possible factors that may have hampered this mechanism. in addition, “ qqe with a negative interest rate, ” which was introduced in january 2016, has already exerted substantial downward effects on interest rates through a combination of the negative policy rate and jgb purchases. at the same time, it has had a variety of impacts on financial institutions and markets. we also would like to assess the mechanism of this policy as well as its effects and influences on the real economy and the financial side. this is our thinking and motivation behind the comprehensive assessment. naturally, the emphasis may vary among policy board members depending on his / her view. let me make it clear that we do not have any specific future directions of monetary policy at this moment. we would like to work with an open mind so that we can make an assessment from various perspectives and have a discussion in a productive manner on what should be done for the price stability target of 2 percent to be achieved at the earliest possible time. we intend that the comprehensive assessment will contribute to planning monetary

might be assessed as not fully complying with the basel committee ’ s core principles and other international standards that are being developed. the concern we have is that new zealand banks might end up being penalised ( for example, through higher borrowing costs if risk weights in the capital accord are linked to compliance with international standards ). this could result if the process of assessing compliance with international standards becomes a ‘ one - size - fits - all ’, checklist, mechanical tick - the - boxes, approach. we have stressed in our submissions to the basel committee that assessing compliance with any international standard needs to be focussed on looking at whether the substance, rather than the form, of the standard is being met. i should add that, notwithstanding these concerns, new zealand strongly supports the introduction of international standards. we consider international harmonisation and co - operation as very important in what is rapidly becoming a ‘ borderless ’ global financial system. our plea is that the implementation of such standards be done with the appropriate degree of flexibility to adequately cater for the individual circumstances of each country. to be frank with you, it is impossible to say for sure whether our prudential policy approach is working or not. we have had no bank failures since the new policy was implemented, but then we had remarks by the chairman of the board of the us federal reserve system, dr alan greenspan, at the annual conference of the association of private enterprise education, arlington, virginia, 12 april 1997. speech by mr william j mcdonough, president of the federal reserve bank of new york and chairman of the basel committee on banking supervision, before the monetary authority of singapore, singapore, on 24 march 2000 no bank failures in the previous 100 years either ( although we certainly had some banks which would have failed, in the late eighties, had their shareholders not injected a lot more capital ). moreover, all but one of the 17 banks in new zealand are now foreign - owned, an increase in the proportion of banks in foreign ownership over the last decade, and that also means that the new zealand case is not necessarily a compelling demonstration of the validity of our market - based approach. but there has been quite a lot of anecdotal evidence that bank directors are now taking their responsibilities more seriously, and there seems to have been a marked increase in the attention given to internal controls. we had a mild recession in the first half of 1998, and a related fall in the value of the new zealand dollar of some 30 per