a moderate increasing trend with the impact of covid - 19 waning. turning to the household sector, private consumption has picked up gradually on the whole ( chart 3 ). although consumption, mainly of services such as eating and drinking as well as accommodations, has remained at a low level, private consumption has been backed by various measures to support income and stimulate demand. it is likely to continue picking up, but while vigilance against covid - 19 continues, the pace is expected to be quite moderate, mainly for face - to - face services consumption. thereafter, with households and firms adapting to a " new lifestyle " and the impact of covid - 19 waning, an uptrend in private consumption is likely to become evident gradually. the employment and income situation, which shows the underlying developments in private consumption, has been weak. the number of employed persons has decreased ; in particular, a remarkable decline in non - regular employees has been seen, such as in the eating and drinking as well as travel - related industries. the year - on - year rate of change in nominal wages has been negative. however, expansion in the employment adjustment subsidies, for example, has somewhat halted job cuts. in addition, a significant increase in bankruptcies of firms has been avoided on the back of the government's and the bank's various measures. against this background, the employment and income situation is likely to turn to an improving trend, with domestic and external demand recovering. based on these developments, the outlook for economic activity is as follows ( chart 4 ). as a baseline scenario, japan's economy, with economic activity resuming and the impact of covid - 19 waning gradually, is likely to continue to follow an improving trend. that said, the pace is expected to be only moderate while vigilance against covid - 19 continues. according to the forecasts of the majority of the policy board members for the growth rates, the economy is projected to register significant negative growth in the range of minus 5. 6 to minus 5. 3 percent for fiscal 2020, but grow in the range of 3. 0 to 3. 8 percent for fiscal 2021 and then in the range of 1. 5 to 1. 8 percent for fiscal 2022. let me move on to price developments ( chart 5 ). the year - on - year rate of change in the consumer price index ( cpi ) is likely to be negative for the time being, mainly affected by covid - 19

an international and asian perspective, ” speech given at the bank negara malaysia – bank for international settlements high level seminar in malaysia, december 2009. negative spiral intensified as capital shortages and liquidity shortages mutually affected each other. responses based on microprudence crises – as i just discussed – appear in the shape of capital and liquidity shortages suffered by financial institutions. therefore, a natural regulatory and supervisory approach to prevent the recurrence of a crisis is to sufficiently raise the minimum levels of required capital and liquidity financial institutions should hold. this approach focuses on reducing the possibility that individual financial institutions fail and could therefore be described as a response based on microprudence. with regard to capital shortages suffered by financial institutions, the recent crisis revealed a variety of issues. one of these is that the most remarkable increase in leverage took place not in the traditional banking business but outside the banking business. for example, financial institutions held securitized products on their trading books, for which risk weightings under capital adequacy regulations are small, although they later turned out to be highly risky financial products. while the size of trading books was less than 10 percent of total assets for japanese financial institutions, for some financial institutions in the united states and europe, it reached about 40 percent. consequently, when risk - asset based capital ratios were used as a yardstick, major financial institutions ’ leverage, at least superficially, did not seem that excessive, and their capital bases appeared sufficient. investments in securitized products by major financial institutions were carried out through sivs they had set up, and the funding for these sivs was provided through credit from their parent financial institutions. as a result, as later revealed, risks were shouldered by the parent financial institutions themselves. in a case such as this, the necessary regulatory and supervisory response would have been to accurately gauge the risks carried by financial institutions and the necessary capital, and to require individual financial institutions to hold more capital. can problems be solved through microprudence alone? such regulatory and supervisory responses based on microprudence are necessary and their importance should not be underestimated. as i will explain in detail later, the bank also conducts on - site examinations and off - site monitoring of financial institutions, carrying out various examinations of financial institutions ’ capital, liquidity, and risk management, and giving necessary advice. however, i believe that the recent global financial crisis has shown that it is difficult to achieve financial system stability and to contribute to the sustainable growth of