s economic activity and prices. meanwhile, japan's financial system has maintained stability on the whole. although attention is warranted on, for example, the impact of the tightening of global financial conditions, the financial system is likely to remain highly robust on the whole, even in the case of an adjustment in the real economy at home 1 / 2 bis - central bankers'speeches and abroad and in global financial markets, mainly because japanese financial institutions have sufficient capital bases. regarding financial risks from a longer - term perspective, while there is a possibility that prolonged downward pressure on financial institutions'profits may lead to a gradual pullback in financial intermediation, the vulnerability of the financial system could increase, mainly due to the search for yield behavior. although these risks are judged as not significant at this point, it is necessary to pay close attention to future developments. ii. conduct of monetary policy next, i will explain the bank's conduct of monetary policy. the bank considers that sustainable and stable achievement of the price stability target is not yet envisaged with sufficient certainty at this point, and that it is important to closely monitor whether a virtuous cycle between wages and prices will intensify. in this situation, it will patiently continue with monetary easing under quantitative and qualitative monetary easing ( qqe ) with yield curve control, aiming to support japan's economic activity and thereby facilitate a favorable environment for wage increases. in october, the bank decided to conduct yield curve control with the upper bound of 1. 0 percent for 10 - year japanese government bond ( jgb ) yields as a reference and to control the yields mainly through large - scale jgb purchases and nimble market operations. this decision was based on the assessment that it was appropriate for the bank to increase the flexibility in the conduct of yield curve control. the bank will conduct monetary policy with the aim of achieving the price stability target of 2 percent in a sustainable and stable manner, accompanied by wage increases. thank you. 2 / 2 bis - central bankers'speeches

. ii. conduct of monetary policy next, let me explain the bank ’ s conduct of monetary policy. first, the bank has been pursuing powerful monetary easing through comprehensive monetary easing. under the comprehensive monetary easing framework, the bank encourages a decline in longer - term market interest rates and a reduction in various risk premiums through the asset purchase program. at the monetary policy meeting held last week, the bank, with a view to responding to the downside risks to the economy that i bis central bankers ’ speeches described earlier, decided to increase the total size of the program by about 10 trillion yen, to about 50 trillion yen. second, the bank has been making efforts to ensure financial market stability. third, in order to meet the biggest challenge for japan ’ s economy, which is the strengthening of the foundations for economic growth, the bank has been providing funds to private financial institutions that make lending and investment consistent with the policy goal. the funds are provided against collateral such as government securities, at a very low interest rate. with a view to making this framework more effective, in june 2011 the bank decided to establish a 500 billion yen new line of credit, through which it extends loans to financial institutions for their equity investments and the so - called asset - based lending ( abl ). the bank recognizes that japan ’ s economy faces the critical challenge of overcoming deflation and returning to a sustainable growth path with price stability. based on such strong recognition, the bank will continue to consistently make contributions as the central bank through the three - pronged approach that i have explained. bis central bankers ’ speeches