functioning in cp and corporate bond markets was a good example. by contrast, the stagnation of the economy as symbolized in deflation is a deep - rooted problem, and a response to it will be different in nature from that to a financial crisis. like there is no quick fix for lifestyle diseases, we believe it important, while significant effects are not seen immediately, to consistently maintain accommodative monetary conditions. the bank reduced the policy rate to virtually zero percent. in addition, to further enhance accommodative monetary conditions, the bank introduced a measure to encourage a decline in the longer - term interest rates in december 2009. it is a measure to provide three months ’ funds against a broad range of collateral in an amount of 10 trillion yen at a fixed low rate of 0. 1 percent. thanks partly to the measure, not only market interest rates but also firms ’ funding costs have declined further. the amount to be provided through the measure was substantially increased to 20 trillion yen in march. that step was to expand the measure to encourage a decline in longer - term interest rates while coping with the fact that, from april onward, fund provision through special funds - supplying operations to facilitate corporate financing from the bank will decline. the bank ’ s decision on further easing at a time when the economy has been somewhat improving more than projected was considered by some as an unexpected decision. however, since it continues to be the case that some time is needed for japan ’ s economy to return to a sustainable growth path with price stability, we judged it necessary to ensure the improvements in economic activity and prices through an additional easing measure. i believe that this point will be understood easily if the following is taken into account. there is a risk that, when firms ’ activity has contracted, the effects of low interest rates might not be fully exerted. as long as firms do not have willingness, low interest rates do not necessarily lead to an increase in investment and employment. by using an old saying, we sometimes say “ you can lead a horse to the water, but you can ’ t make him drink. ” put it the other way round, what would happen if you bring him to the water at a time when the exhausted horse has somewhat regained strength? we might be able to say that the horse is more likely to drink water and might start to run around vividly again. in such a way, we believe that the additional accommodative measure taken by the bank this

). to start with, in 1999, the bank adopted a “ zero interest rate policy, ” in which the overnight money market rate was guided close to 0 percent. in 2001, the bank switched its main operating target from the overnight money market rate to current account balances held by financial institutions at the bank of japan, which are equivalent to what in the united states are usually called “ reserve balances. ” under the policy, which lasted from 2001 to 2006, the bank provided large amounts of liquidity, so that reserve balances eventually reached several multiples of required reserves. to the best of my knowledge, this was the world ’ s first quantitative easing. at the same time, the bank committed itself to continuing with the policy until the annual rate of change in the consumer price index ( cpi ) would register “ stably a zero percent or an increase. ” this means that the bank also pioneered what in recent years has come to be called “ forward guidance. ” after the global financial crisis in 2008, japan ’ s economy decelerated significantly as a result of the global recession, even though the direct impact of the global financial crisis on japan ’ s financial system was relatively small. cpi inflation, which had been positive since 2006, fell back into negative territory. against this backdrop, the bank introduced another policy initiative in 2010 which we called “ comprehensive monetary easing. ” under this policy, the bank purchased large amounts of jgbs, focusing in particular on those with maturities of up to three years, pushing down interest rates on such jgbs to close to 0 percent. in addition, to reduce risk premiums, the bank also – though to a lesser extent – purchased privatesector debt such as corporate bonds and commercial paper ( cp ), as well as equity financial products such as exchange - traded funds ( etfs ) and real estate investment trusts ( reits ). moreover, in order to encourage lending by financial institutions, the bank introduced special long - term lending facilities with a low interest rate, which are similar to the funding for lending scheme by the bank of england ( boe ) and the targeted longer - term refinancing operations ( tltros ) by the european central bank ( ecb ). this means that the unconventional monetary policy measures taken by the bank of japan can stand comparison with those taken by other central banks at least in terms of their breadth and variety. bis central bankers ’ speeches the series of unconventional monetary policy measures implemented by the