of a level playing field and avoidance of competitive distortions, which would otherwise hinder financial integration within the euro area. the financial crisis has prompted a significant development of the regulatory and supervisory framework. under the auspices of the g20, a remarkable amount of work has been done to mend the regulatory shortcomings revealed by the crisis at global and european level. a key element in strengthening the resilience of the financial system has been the adoption of the new basel iii framework. concrete efforts have also been made to reinforce the supervisory framework, with greater emphasis placed on monitoring and assessing macro - prudential risks. the powers and tools of micro - prudential supervisors have also been enhanced. other important regulatory initiatives, notably work on systemically important financial institutions, shadow banking, crisis management and resolution frameworks, are under way. in europe many initiatives have been or are being taken to strengthen the regulatory and supervisory framework. amendments to the capital requirements directive ( crd ) have been made to correct the adverse incentives relating to securitisation and remuneration. a further review of the crd is under way, aligning the european regulatory framework with the goodhart, c. a. e. ( 2009 ). “ procyclicality and financial regulation, ” banco de espana, estabilidad financiera 16, p. 16. bis central bankers ’ speeches basel iii framework, which is expected to improve the resilience and stability of the banking system by enhancing the quality and quantity of capital and introducing leverage and liquidity requirements. other important initiatives have also been taken or are under way to improve and extend the scope of regulation. examples include the regulation of hedge funds through the adoption of the alternative investment fund managers directive and credit rating agencies, and the upcoming review of the markets in financial instruments directive ( mifid ). in addition to the ongoing initiatives to reinforce the regulatory framework, the supervisory framework in europe has also been enhanced through the establishment of the european systemic risk board ( esrb ) and the three european supervisory authorities ( esas ). these authorities should help to strengthen the oversight of risks. the risk warnings and recommendations to be issued by the esrb should become a powerful tool to identify significant risks in the financial system. and the powers of the three esas – notably their mediation and coordination powers, their envisaged role in emergency situations and, in particular, their mandate to create an eu rule book through the issuance of binding

reference < not rigid limits > range of 10 - year jgb yield fluctuations if upside risks to japan's economic activity and prices materialize 1. 5 0. 0 nimbly conducting market operations enhancing the sustainability of monetary easing by conducting ycc with greater flexibility inflation expectations cpi ( reference ) ( all items less 2. 0 cpi fresh food ) ( all items less fresh fiscal 2023 % by fixed - rate purchase operations note : figures for market participants, economists, households, and firms are from the quick monthly market survey, the esp forecast, the opinion survey on the general public's views and behavior, and the tankan note : figures indicate the medians of the policy board members'( short - term economic survey of enterprises in japan ), respectively. forecasts ( point estimates ). if downside risks to japan's economic activity and prices materialize - decline in long - term interest rates chart 11 central bank balance sheets level 1, 400 1, 200 1, 000 ratio to nominal gdp end of cy 2006 = 100 japan euro area australia united states united kingdom canada % japan euro area australia united states united kingdom canada cy 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 cy 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 note : figures for the united kingdom until september 2014 are for total assets ; from october 2014, they are for the sum of the main components of assets. sources : data from central banks and statistical authorities ; haver. chart 12 major economic indicators cpi, real gdp, and unemployment rate y / y % chg. inverted, % cpi and wages y / y % chg. nominal wages real gdp ( left scale ) real wages cpi ( less fresh food, left scale ) unemployment rate ( right scale ) cpi ( less fresh food ) - 2 - 2 - 4 - 6 cy 85 - 4 - 6 cy 85 note : figures for the cpi ( less fresh food ) exclude the effects of consumption tax hikes. in the right panel, figures for nominal wages and real wages from 2016 onward are based on continuing observations following the sample revisions. sources : cabinet office ; ministry of health, labour and welfare ; ministry of internal affairs and communications. chart 13 distribution of consumer price changes japan united states share of the number of items, % share of the number of items, % august 2023 august 2023 september 2019 september 2019 - 10 or less - 5 or more y /