and settlement systems – including the committee on payments and market infrastructures of the bank for international settlements – the bank actively participates in international discussions on innovations in payments and payment and settlement systems. from the standpoint of a central bank, the bank is monitoring closely and with great interest the developments in innovations in payments and payment and settlement systems, from a range of perspectives. these include the safety of payments, the efficiency of payment services and the convenience to users, stability of the financial system, and the influence on finance intermediation and the economy. to make the innovations in payments that are taking place due to innovations in information technology truly useful for the users of financial services and the economy, it is important to develop a network and win - win relationships with a wide range of entities beyond the traditional financial industry. the bank, as the nation ’ s central bank, is firmly committed to being a catalyst in fostering such developments. moreover, i am pleased to announce that the bank will soon establish a “ fintech center ” in its payment and settlement systems department. we aim to reinforce our efforts in which the new wave of fintech will contribute to enhancing financial services and achieving sustainable growth of japan ’ s economy. i would like to close my remarks now by wishing that today ’ s forum on payment and settlement systems will generate new knowledge and perspectives, and that the stimulating discussions here will lead to further development of the financial markets and the vitalization of economic activities. thank you for your attention. bis central bankers ’ speeches

2 percent inflation is a given. to reach this world, it is bis central bankers ’ speeches necessary to further raise both actual inflation rates and inflation expectations. this is the reason why i said earlier that we are only half way there. the bank will therefore continue with qqe, aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. if the outlook changes due to the manifestation of some risk factors, the bank will make adjustments without hesitation if this is judged necessary for achieving the price stability target. iii. toward strengthening japan ’ s medium - to long - term growth potential as i explained, japan ’ s economy has been recovering moderately and is on a path suggesting that the 2 percent price stability target will be achieved as expected. against this backdrop, discussions on labor shortages and supply capacity constraints have increasingly come to the forefront. although the decline in the potential growth rate was clearly recognized as one of the key challenges facing japan, this was overshadowed by concerns over excess labor and excess capacity, which were considered to be the most immediate problems, since demand was weak. however, the situation has changed in the past year or so. with the increase in demand thanks to large - scale monetary easing, fiscal spending, and the rejuvenation of private - sector activity, the supply capacity constraints that were lurking below the surface have now become apparent. in this situation, it seems to have become widely recognized that it is important to enhance supply capacity from a medium - to longterm perspective. in my view, with the supply capacity constraints having surfaced, this is a golden opportunity to push ahead with initiatives to address the challenges japan is facing. therefore, i would like to offer my view on the issue of japan ’ s medium - to long - term growth potential. an economy ’ s medium - to long - term growth potential, in other words, the potential growth rate, depends on the growth in production factors, that is, capital and labor, as well as improvements in productivity through innovation and the like. japan ’ s potential growth rate has been declining as a trend since the 1990s ( chart 10 ). looking in more detail at the reasons for the decline in japan ’ s potential growth rate, the deceleration in capital accumulation and in productivity growth in the 1990s played a major role. during this period, japanese firms were weighed down by the need to resolve the so - called three excesses – excess labor, capital stock