of cp and corporate bond markets had shifted their funding sources to borrowing from banks, banks responded by using much of their remaining lending capacity. and second, the worsening of funding conditions at large firms had contracted business - to - business credit for trading partners and affiliated firms. as a result, in the march 2009 tankan ( short - term economic survey of enterprises in japan ), the diffusion index of funding conditions plunged to the lowest level in about 10 years since 1998, regardless of firm size. subsequently, thanks to the regained stability in global financial markets and the effects of various policy measures in japan, japan's financial environment has been showing signs of improvement. in particular, the issuing conditions of cp and corporate bonds have improved markedly. in the cp market, issuance spreads for even low - rated firms have declined to a level below those before the failure of lehman brothers and the bank judges that the market has already come back to a normal state. in addition, the corporate bond market has also restored favorable issuing conditions as a whole, as seen in the fact that credit spreads have declined and the total value of issuance in the first half of fiscal 2009 marked a record high. nevertheless, we should not forget that there is still lingering severity in japan's financial environment. in particular, the improvement in funding conditions at small firms has been limited, compared with that of large firms. that would basically be attributable to the severe profit environment for small firms, as shown in the moderate pace of improvement in their business sentiment, albeit underpinned to some extent by the emergency guarantee program. the bank will continue to examine corporate financing as a whole including that of small firms, through various surveys such as the tankan as well as interviews through the bank's branch network. iii. conduct of monetary policy i have explained the developments in the economies at home and abroad as well as the developments in prices. based on those developments, i will finally explain the bank's thinking behind the conduct of monetary policy. the bank reduced the policy rate to 0. 3 percent in october 2008 and to 0. 1 percent in december 2008 and has been maintaining the level unchanged since then. to address the rapid contraction of financial markets triggered by the failure of lehman brothers, the bank implemented various temporary measures, including extraordinary ones for a central bank such as outright purchases of cp and corporate bonds. at the monetary policy meeting ( mpm ) held on october 30, the bank made a decision on the policy rate

the governing council ’ s quantitative definition of price stability, together with our stability - oriented monetary policy strategy – in short : we communicate what we are trying to achieve, and how we go about achieving it. in practical terms, this means that communication revolves around providing a narrative about the economy and the outlook for price stability relative to our objective. the ecb has established various channels through which this communication effectively reaches the whole of the euro area. these channels include the president ’ s press conferences, speeches by members of the governing council and the different official publications, which are translated into the official languages of the european union. these were our main communication channels before the crisis, and they continued to play an important role during the crisis. however, like other central banks, we have seen that in turbulent times it was useful to strengthen our communication. in particular, clarity of communication has been essential. it ’ s not to say that clarity suddenly became a new principle of communication during the crisis. from the very beginning, we have insisted on improving the clarity – as opposed to the mere quantity – of our communication. 5 but the recent experience has shown that what constitutes clarity under normal circumstances may not be enough in more uncertain times. let me highlight three instances where we found it useful to go beyond the standard clarity of our communication in order to achieve our price stability objective. the first time, in the summer of 2012, we were faced with a severe tail risk that did not just pose downside risks to price stability, but actually threatened the very integrity of the euro area. financial markets were rife with talk about the so - called “ redenomination risk ”. spreads in some stressed jurisdictions increased to levels that were difficult to justify by the underlying fundamentals. as a result, there were clear risks to the singleness of the monetary policy of the ecb, aggravating an already impaired transmission mechanism. in response, we used our communication to “ draw a line in the sand ” : we had to clarify that we would do “ whatever it takes ” to deliver on our price stability mandate. this was followed up with further decisions and communication on how concretely, in our view, the necessary “ whatever ” could materialise at that particular juncture : the outright monetary transactions ( omt ) programme. what did we do? effectively, we reaffirmed our full commitment to our price stability mandate. in addition, we said that we considered the pricing - in of unwarranted denomination scenarios