continue to be more active in extending loans, mainly to blue - chip companies, while carefully evaluating the credit risks involved. there seem to be no significant changes in the fund - raising conditions of firms in the markets for such instruments as corporate bonds and cp. on the other hand, the improvement in economic activities has not stimulated corporate demand for external funds, since firms ’ cash flow is at a high level in parallel with the recovery in profits. moreover, firms continue to reduce their 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, lending by private banks remains sluggish, declining at around 2 percent year - on - year. meanwhile, the amount outstanding of corporate bonds issued is slightly above the previous year ’ s level. the amount outstanding of cp issued continues to be at a high level. recently, the growth rate of money stock ( m2 + cds ) is slightly increasing due to the inflow from postal savings. as for funding costs for firms, short - term funding rates basically remain flat but long - term funding rates seem to be declining reflecting the developments in market interest rates. in this financial environment, the lending attitude of financial institutions and corporate financing conditions remain easy. however, the effects of the decline in stock prices on the fund - raising conditions of firms need to be carefully monitored.

profits ; in other words, not endanger financial stability via an overheating channel. fintech : a new wave of it innovation in such an environment, fintech, which is fast emerging worldwide, could potentially be an " enabler, " opening up new business frontiers and allowing financial institutions to free themselves from the yoke of low profitability. looking at the current state of the global economy, we find the rise of " connected businesses, " which tie together information and services almost instantly over a wide horizon, against the backdrop of advances in digital communications technologies and epitomized with terms like " the fourth industrial revolution " and the " internet of things ( iot ). " " sharing economy " is one example of such development that is gaining traction everywhere, and broadly speaking, fintech can be understood in the same context. a business model where banks develop and sell insurance products. it became popular in europe ( france, italy, and spain in particular ) from the 1990s onward, involving mainly life insurance products. however, there have been signs of deemphasizing this model recently, reflecting doubts on synergies achieved. this trend is probably changing the nature of innovation from the longstanding emphasis on improving individual products to an emphasis on transforming how services are provided ; in other words, the distribution channel of services. in adapting to such a change, firms that can perform meticulous customer analytics will be able to more appropriately and promptly provide individual customers with services that are tailored to their attributes and preferences. such " personalization of services, " as it often is called, is making rapid inroads, especially in fields such as healthcare and development of new drugs. 5, 6 it also could become more prevalent in finance, leveraging on advances in fintech, in areas such as retail payments, remittances, and lending, as well as in less capital intensive areas such as transaction banking and wealth management. 7 here, it is interesting to note that trends in the two of the most heavily regulated activities - - medicine and finance - - are pointing in the same direction with the personalization of services. meanwhile, financial institutions cannot shy away from improving their cost structure in meeting their profitability goals, and here again, fintech can make significant contributions. for example, it is a well - known fact that the return on equity ( roe ) of financial institutions is materially higher in the nordic economies, where online banking is prevalent and branch network density is generally low