2013, the boe has reinvested the cash flows associated with maturing gilts in the facility in order to maintain the stock of securities at a steady level. in its february 2014 inflation report, the mpc provided guidance on its expected normalization framework, laying out an approach in which its bank rate – the deposit rate for central bank reserves in the u. k. – is the active marginal instrument for monetary policy while portfolio - related tools, including reinvestments and asset sales, receive less emphasis. specifically, the mpc suggested that it intends to maintain its stock of purchased assets, including reinvesting the cash flows associated with maturing securities, at least until it raises its target short - term interest rate from its current level. meanwhile, the boj is still purchasing assets under qqe, which it launched in april 2013. with a goal of increasing its japanese government bond ( jgb ) holdings by ¥50 trillion per year, it has not yet initiated a discussion of eventual normalization. when that time comes, however, the boj will be holding a large portfolio of longer - term jgbs. the boj ’ s balance sheet will therefore look markedly different than it did when the qep ended in 2006, at which time the boj just allowed short - term funds - supplying operations to roll off. the portfolio size and composition to which each central bank eventually normalizes will, of course, depend on what it eventually determines is appropriate to support implementation of monetary policy in the longer run. indeed, the fomc has indicated that in the longer run, it will hold no more securities than necessary to implement monetary policy efficiently and effectively, and that it will hold primarily treasury securities. the ecb has also used unconventional measures to provide accommodation, but unlike the federal reserve, boj, and boe, this has primarily been through liquidity provided directly to the banking system via longer - term refinancing operations, rather than through asset purchases. this liquidity was provided at fixed terms of up to three years, thus allowing the size of the ecb ’ s balance sheet to normalize automatically as refinancing agreements mature. by contrast, the ecb ’ s upcoming purchases of asset - backed securities and covered bonds will present it with longer - term portfolio considerations. finally, i should note that central banks – like other financial market participants – need to remain aware of changes in the financial market landscapes in which they operate. they may

includes loans to firms, individuals, and local governments. figures for the bank lending rate are the long - term average contract interest rate on new loans and discounts by domestically licensed banks. sources : bank of japan ; bloomberg ; ministry of internal affairs and communications. chart 13 ii. the bank's conduct of monetary policy financial and economic developments after the introduction of qqe base pay increase and scheduled cash earnings consumer prices index ( cpi ) y / y % chg. y / y % chg. base pay increase cpi ( less fresh food and energy ) scheduled cash earnings ( full - time employees ) hourly scheduled cash earnings ( part - time employees ) - 1 - 2 - 1 fy 90 cpi ( less fresh food ) - 3 cy 07 notes : 1. in the left - hand chart, figures for scheduled cash earnings from 2016 / q1 onward are based on continuing observations following the sample revisions of the " monthly labour survey. " 2. in the right - hand chart, the cpi figures exclude the effects of the consumption tax hikes, policies concerning the provision of free education, and the " go to travel " campaign, which covers a portion of domestic travel expenses. the figures from april 2020 onward are based on staff estimations and exclude the effects of measures such as free higher education introduced in april 2020. sources : ministry of health, labour and welfare ; japanese trade union confederation ( rengo ) ; ministry of internal affairs and communications. chart 14 conclusion scarring effects of external shocks after the gfc after the bubble economy cy 1990 = 100 cy 2007 = 100 real gdp cy 85 real gdp trend line for 5 years prior to the crisis source : cabinet office. cy 02 trend line for 5 years prior to the crisis