as to overseas, may well occur. and third, measures intended for specific sectors, such as housing, give rise to the issue of conflict with other governmental measures. in fact, the inability to employ these macroprudential tools in a timely fashion entails the risk of accelerating financial cycles. “ hard ” measures, which involve the adjustment of regulatory ratios in a countercyclical manner, are relatively new. given this, the ultimate challenge, including responses to the various others i have just mentioned, is how to carry out these measures in an accountable manner. one point i want to stress in relation to this is that, in dealing with financial imbalances, what is important and effective is supervisory guidance by central banks and financial authorities namely, their “ soft ” approach, by which they issue advance warnings while providing guidance and advice to financial institutions based on assessments of financial system stability. supervisory guidance for financial institutions is primarily regarded as a microprudential measure. by carrying them out from a macroprudential perspective in an industry - wide and collective manner, however, the soft approach is capable of producing effects as a form of macroprudential policy. moreover, compared with hard approaches like the ccb, this approach allows for more forward - looking and flexible responses. based on such understanding, the bank ’ s disclosure of the challenges and risks involved in ensuring financial stability, through the publication of the financial system report, and its responses to these issues, through on - site examinations and off - site monitoring, are considered part of macroprudential policy. second, let me shift my focus to international financial regulations as a form of “ structural ” macroprudential policy. reform of international financial regulation is entering its final stages. basel iii and responses to the issue of “ too big to fail, ” such as tlac ( total loss - absorbing capacity ), are measures designed to substantially strengthen the resilience of the global financial system. furthermore, it is important to acknowledge the fact that financial authorities and the financial industry worldwide have developed a common understanding on international regulation, overcoming differences in their views. this indicates a major step forward, in that we have created a foundation for international cooperation to tackle many issues and crises that could arise in the future. bis central bankers ’ speeches having said this, i would like to mention several points with regard to the finalization and gradual implementation of the basel iii regulatory reforms. the first point is the importance of a comprehensive calibration

joint efforts in carrying out macroprudential policy, fulfilling their respective functions. furthermore, in june 2014, the two entities together established a task force with the aim of holding regular joint meetings, and they have been fostering further coordination. the bank is determined to continue with its efforts to contribute to ensuring the stability of the financial system, making use of these arrangements. thank you. bis central bankers ’ speeches