by the fall of the berlin wall in 1989 – the surge in the number of economies participating in the global market economy and the resulting intensification of global competition. furthermore, the rapid expansion of the market economy, together with the progress in it and the ample inflow of capital to emerging economies, led to a rapid catch - up in industrialization among emerging economies and an increase in their domestic demand. bis central bankers ’ speeches while these rapid global economic changes were occurring, japan needed to devote substantial economic resources to dealing with the post - bubble adjustments. as a result, japan was, in some respects, slow in adapting to these changes by, for example, achieving structural reforms and capturing demand from emerging economies, both of which bring about forward - looking investment. following the collapse of the bubble economy, it seemed for a time that some firms had been successful in riding out the strength of the yen in 1995 and in ambitiously undertaking wide - ranging management reforms and restructuring to develop global business strategies. however, the changes in the global economy have been progressing even faster than such efforts, and for many firms the fruits of such endeavors have been limited. in view of the situation i have described, i will now talk about three issues that japan faces. a. the low birth rate and population aging in 2005, japan ’ s population for the first time in the postwar period registered a decline. the working - age population – that is, the population aged between 15 and 64 years old – in fact had already peaked in 1995 at 87 million and has been declining since then, due to the low birth rate and population aging. in the 15 years to 2010, the working - age population declined by 5. 88 million. during the same period, the total population increased by about 1. 61 million, with the population aging further. according to population projections made by the national institute of population and social security research in 2006, the decline in the working - age population will continue to outpace that in the total population until the middle of the 21st century, and in 2055 the working - age population will have almost halved from the current level to 45. 95 million in the medium variant projection. unless the labor force participation rate and / or labor productivity increase, these trends will lower economic growth and exert downward pressure on the growth potential. the decline in the working - age population restrains economic growth not only from the supply side but also from the demand side, by reducing the number of consumers earning wages

measure to support strengthening the foundations for economic growth the critical challenge facing the japanese economy is to raise the potential economic growth rate and productivity. this can be achieved by exploring new areas of growth, and private firms, on their own initiative, should play the primary role in this regard to survive competition and attain growth. however, taking into account that the diminished growth potential of the economy is one of the fundamental problems underlying deflation in japan, the bank concluded that an effective way to use its functions as the central bank was to provide support to strengthen japan ’ s future foundations for economic growth from the financial side. the bank expects that this measure will act as a catalyst and provide support for the efforts made by private firms and financial institutions on their own initiative. based on this thinking, the bank decided in june 2010 to introduce the fund - provisioning measure to support strengthening the foundations for economic growth, through which it provides long - term funds at a low interest rate to financial institutions that are making efforts in terms of lending and investment toward strengthening the foundations for economic growth. this measure extends loans with maturities of up to four years at a low interest rate equivalent to the policy interest rate to financial institutions for their lending and investment in a broad range of areas and types of business that will eventually lead to the strengthening of the foundations for economic growth. the first new loan disbursement was carried out in september 2010, and loans totaling 462. 5 billion yen were disbursed to 47 borrower financial institutions. the average amount per lending or investment project to be financed by such loans was 360 million yen, and the average duration of lending or investment projects was 8. 2 years. funds were provided to a broad range of areas such as “ environment and energy business, ” “ development and upgrading of social infrastructure, ” “ medical care, nursing care, and other health - related business, ” and “ regional and urban revitalization business. ” the second new loan disbursement will be conducted in the near future, and a significant number of financial institutions, about 140, have applied for the measure. some financial institutions have already started actively exploring potential demand on their own initiative, bearing in mind their future utilization of the measure. the bank therefore believes that the measure has made a rather good start, in that it has prompted financial institutions to explore new areas of growth in line with its intended purpose. bis central bankers ’ speeches b. comprehensive monetary easing policy next, i will talk about the