catalyst in prompting financial institutions to develop their own initiatives to strengthen the foundations for economic growth. in june 2011, the bank introduced a new lending arrangement of 500 billion yen for the measure, through which it extends loans to financial institutions for their equity investments and asset - based lending ( abl ). the loans for abl allow financial institutions to use their expertise to identify and lend to potential growth firms without conventional collateral or guarantees. the outstanding balance of loans disbursed by the bank under this arrangement is 89. 1 billion yen as of march 2012. although this is not a particularly large amount, the new arrangement has been producing some positive effects in terms of providing support for financial institutions ’ new initiatives. at the monetary policy meeting held on march 12 and 13, 2012, the bank decided to enhance the fund - provisioning measure to support strengthening the foundations for economic growth by introducing new lending arrangements and increasing the total amount of loans available through the measure from 3. 5 trillion yen to 5. 5 trillion yen. the decision was made with a view to underpinning efforts to strengthen the foundations for economic growth and encouraging a wider range of investments and loans that serve this purpose. here are the specifics. first, the bank decided to extend the deadline for applications for new bis central bankers ’ speeches loans by two years to march 31, 2014. second, the bank decided to introduce a new lending arrangement of 500 billion yen for small - lot investments and loans of 1 million yen or more but less than 10 million yen, in response to requests by relatively small financial institutions. third, the bank decided to increase the 3 trillion yen ceiling for the outstanding balance of loans under the main rules by 500 billion yen for the purpose of providing support to initiatives by financial institutions that started to participate in the measure at a later time. and fourth, the bank decided to introduce a new lending arrangement of 1 trillion yen that will use its u. s. dollar reserves in order to support, through the provision of foreign currency liquidity, financial institutions ’ own initiatives to help firms capture increasing global demand and thereby enhance their growth potential. the details of the arrangement will be examined at the next monetary policy meeting, to be held in april 2012. b. the bank ’ s measures following the great east japan earthquake it has been about one year since the great east japan earthquake, which hit japan on march 11, 2011. i would like to take this opportunity to extend my sincere condolences to all those who have suffered

obtain a firm footing, some industries achieved earnings growth comparable to or even exceeding that attained in the three years during the economic boom of the latter half of the 1980s : namely, the electrical and precision machinery industries, which have succeeded in adjusting to the new international division of labor ; and the pulp and paper industry in the raw materials sector, which has been able to benefit from the increased volume of information processed and distributed in today ’ s technological age. i have so far emphasized the brighter side of the domestic economy with the hope of further encouraging the efforts of domestic industries, but reality is obviously not so simple. during periods of transition of industrial structure, the contrast between the bright and dark sides tends to become stronger. focusing on the dark side, the mismatch between labor supply and demand has become greater, and restructuring burdens have been particularly heavy on small and medium - sized firms. looking back at the postwar period, the japanese economy successfully underwent several major changes in the industrial structure and shifts in leading industries. there is no doubt that during the periods of transition, management of firms faced great uncertainties about the future, and that it was extremely difficult to accurately predict which would be the growth industries in the coming years. however, during the era of high economic growth, the rapid expansion of the economy absorbed the negative impact arising from the structural adjustment of the industries. the main difficulty that the current economy faces seems to lie not in the industrial restructuring itself, but in the fact that the current economic growth is not strong enough to provide a similar “ shock absorber ” effect. for this reason the implementation of structural policy, such as deregulation, has become an urgent issue. in order to promote industrial restructuring, it is necessary to create new investment opportunities and to encourage unrestricted and creative business activity through deregulation. it is also important to increase labor mobility and facilitate land transactions. c. economic outlook and monetary policy management in order for the japanese economy to be put firmly on a self - sustaining recovery path in the face of reduced fiscal support, it will be necessary for the structural adjustment to continue to progress and for the virtuous circle between production, income, and expenditure to gain further strength. in this respect, firms have been responding steadily to the structural adjustment pressures. the decline in net exports, which had been a drag on economic recovery, has been slowing recently. in addition, inventory adjustment, which has been under way in certain sectors since this spring, has virtually been completed in