- not only major banks but also regional ones - - have continued to expand sales of investment trusts, such that these over - the - counter sales account for approximately 40 percent of total investment trust sales at present. naturally, this does not mean that all investment products are accepted by individual customers only because they are sold over bank counters. in the years just after the ban on investment trust sales was lifted in 1998, banks mostly sold low - risk - type investment trusts, such as money market funds, but sales growth during those few years was modest. growth in stock investment trusts for the last couple of years, particularly the surge in monthly - distribution - type investment trusts that mainly purchase foreign bonds, has greatly expanded the sales volume at banks'counters. investment trusts sold by affiliates within the banking groups has increased, but this does not seem to be the primary reason for the rapid growth. rather, it has been due to a change in the sales strategy of independent mediumsized investment companies and foreign investment companies, which have no strong sales network of their own but have started to take advantage of the sales power of bank branches. such investment companies developed products that would be suitable for bank customers, such as monthlydistribution - type products, and also provided bank staff with training on how to sell the investment trusts. i think the key to developing innovative retail financial services hereafter in japan will be how to meet the needs of individual customers by establishing an efficient division of labor within the financial services sector overall, making full use of the effectiveness of sales channels, namely, the network of bank branches. b. competitors other than private financial institutions the second special feature in japan, in the field of financial services for individual customers, is the relatively large presence of nonbanks and public financial institutions in comparison with private banks. for example, nonbanks specializing in consumer finance have a significant share of business dealing with the borrowing needs of individual customers. in addition, even in the area of credit cards, affiliates of retailers such as supermarket chains and independent commercial companies have shown their own strengths in revolving credit. banks have tried to challenge nonbanks by providing loans with lower interest rates than nonbanks, taking advantage of their low fund - raising costs and solid branch networks. nonbanks, however, have established a competitive advantage in loan collection expertise and consumer credit data, and have even fully worked out their distribution channels by introducing automated contracting machines. such competition is behind the recent marked movement toward capital and business

, globalisation has led to an expansion in our markets from which our companies have been able to derive extensive benefits. the prosperity of our foreign trade depends to a large extent on the good shape of the global economy, whose performance has been very good over the past few years. recently, signs of weakness have been observed in the us, but a favourable international environment in 2007 can be expected in view of the unchanged vitality of the asian economy and the recovery of growth in europe. in addition to the favourable impetus from the global economy, our exports also benefited from special conditions on the foreign exchange market. the introduction of the euro resulted in a stabilisation of the european monetary scene, and the swiss franc was sheltered from the speculative disruptions that we have experienced in the past. nowadays our currency is far less volatile that in the 1990s, and this is certainly beneficial for foreign trade. moreover, although the dollar has lost ground over recent years, the euro has regained a level comparable to that of 1999. since swiss inflation was distinctly lower than that of our main trading partners, the real exchange rate index weighted by our exports to 24 countries has declined by almost 10 % over the five last years. the competitive position of our exporters has improved accordingly. nevertheless, it would be precipitate to think that the swiss franc was likely to continue weakening. in many respects, the current situation is paradoxical in view of the fact that currencies from countries where inflation is lowest – the swiss franc and the japanese yen – have lost ground to currencies from countries with a less favourable price outlook. obviously, markets are responding in a short - term manner, as a function of current interest differentials or of expected changes in these differentials, without fully recognising the existing economic fundamentals or fearing the possibility of sudden adjustments in exchange rates. inevitably, this speculative attitude is risky. history has shown us that reversals on foreign exchange markets often take people by surprise, that periods of strength in the swiss franc may alternate with periods of weakness, and that the swiss franc has a tendency to react excessively in times of uncertainty. therefore, caution is called for. our exporters need to retain control of their exchange risks even at times of low volatility. after all, nobody would think of doing without fire insurance just because their house had been spared for a number of years. domestic demand on the right path inevitably, the strong momentum of foreign trade has