parallel with a recovery in profits. moreover, firms continue to reduce debts as part of their balance - sheet restructuring measures. as a result, credit demand in the private sector has continued to be basically stagnant. in view of this, the underlying tone of private banks ’ lending remains sluggish. issuance of corporate bonds and cp has been steady. money stock ( m2 + cds ) grew slower in may compared with the previous month on a year - on - year basis. in this financial environment, corporate financing conditions are easing, and the lending attitude of financial institutions is perceived by firms as less severe. it continues to warrant careful monitoring how these favorable developments in corporate financing environment will affect economic activities.

economy from the fiscal side. moreover, exports are bottoming out, particularly in germany. it is likely that the european economy will start picking up gradually as these developments continue. however, i must say that a fundamental resolution of the european debt problem has only reached the halfway point. the current stability in european financial markets seems to have been brought about because the ecb has been buying time through its large - scale monetary easing. in the meantime, it is necessary to steadily take steps through various structural reforms and toward forming banking, fiscal, economic, and political unions as presented in a roadmap for unification of europe. the time the ecb can buy is limited and might be gradually becoming costly. the chinese economy continues to grow steadily, although the pace of growth has become somewhat lower than that in the past. from the time of inauguration, the new government clearly showed its stance of pursuing structural reforms, by announcing frugality laws and measures to contain real estate prices. against such a backdrop, there has been concern since around the turn of the year that the economy might slow down. however, the government in july showed its stance of focusing on achieving this year ’ s target of economic growth of around 7. 5 percent and it decided various measures that paid due consideration to economic growth ; thus, looking to the future, it is expected that stable growth at around the current pace will continue, supported by resilient domestic demand. in terms of further policy responses, the fiscal situation in china remains relatively sound and there is additional room for fiscal stimulus. owing to these developments, the chance of the chinese economy decelerating significantly, at least in the short run, is viewed as not great. in the meantime, what is somewhat worrisome are emerging economies. looking back, after escaping from acute symptoms of the lehman crisis, the global economy recovered, led by bis central bankers ’ speeches high growth in emerging economies. behind this, there were mainly two reasons. first, the trend of domestic demand in those economies was robust due to the consumption spree associated with a rise in the living standard and to the need to expand social infrastructure. second, after the financial crisis, aggressive monetary easing in advanced economies led to capital inflow to emerging economies, providing additional impetus for emerging economies to grow. however, recently, the u. s. and european economies have been improving, while growth momentum in emerging economies is somewhat weak. the first thing that comes to mind as a reason for this is that