markets for such instruments as corporate bonds and cp. on the other hand, credit demand of private firms continues to lack momentum as corporate demand for external funds is subdued, since firms ’ cash flow is at a high level. 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, the underlying tone of private banks ’ lending remains sluggish. the amount outstanding of corporate bonds issued continues to be above the previous year ’ s level but the growth rate is slowing somewhat. meanwhile, the amount outstanding of cp issued remains at a high level. recently, the growth rate of money stock ( m2 + cds ) is increasing reflecting the inflow from postal savings. funding costs for firms continue to decline as both short - and long - term prime lending rates were lowered, reflecting the decrease in market interest rates. in this financial environment, the lending attitude of financial institutions and corporate financing conditions remain easy. for the time being, attention should be paid to the effects of the additional monetary easing measures taken by the bank, while careful monitoring is still required for the effects of stock price developments on the behavior of financial institutions and the fund - raising conditions of firms.

masaru hayami : exchange rate regimes in the 21st century opening speech by mr masaru hayami, governor of the bank of japan, at the tenth international conference held by the institute for monetary and economic studies, bank of japan, 1 july 2002. * * * it is my great pleasure today to address the 10th international conference hosted by the institute for monetary and economic studies. on behalf of all my colleagues here at the bank of japan, i welcome all the participants. and my special thanks to the institute ’ s two advisors, professor allan meltzer and professor maurice obstfeld. you have done a wonderful job helping us organize the conference. this is the first conference in the 21st century, and for such an occasion my colleagues chose ‘ exchange rate regimes in the 21st century ’ as the theme. exchange rate regimes among major countries experienced several changes after world war ii while fulfilling their expected role of enhancing cross - border trade and investment as well as encouraging world economic growth and preserving price stability. being a central banker, i was also involved in changes in exchange rate regimes. on sunday, august 15, 1971, when u. s. president nixon announced that the us would no longer convert the dollar into gold, i was stationed in the london office of the bank of japan. and i still vividly remember that on the following day, monday, with bundesbank vice - president emminger, i took part in a confidential meeting with us treasury undersecretary volcker. he had flown over to london to explain to the european monetary authorities the president ’ s announcement. most of the major countries, except japan, closed their foreign exchange markets after the announcement. european participants, who broke the ice at the meeting, said that they could not re - open their markets until the us decided the new parity of the dollar. for monetary authorities at that time, the adoption of floating exchange rates was not like the dawn of a new era with full confidence. the then bis president zijlstra termed the trial and error among authorities under the floating exchange rate regime “ a voyage through uncharted waters, ” and that was how all the monetary authorities felt. some 30 years have passed under the floating regime and now we have two challenges for the regime to meet. first, we have to work out how to preserve foreign exchange rate stability between major currencies. the dollar has functioned as a key currency under the floating exchange rate regime. its exchange rate on other major currencies