linkage with the dollar, such as emerging economies and commodity - exporting economies, have ended up importing u. s. monetary easing, which in turn brings about economic expansion in countries other than the united states. u. s. global firms, both manufacturing and nonmanufacturing, are deeply involved in business operations widely around the world. thus, economic expansion in areas with a strong linkage with the dollar would enhance the profits and growth expectations of u. s. businesses, which would in turn entail a rise in u. s. stock prices and lead to a recovery in private consumption. therefore, it can be said that the powerful monetary easing policy that has continued for more than two years in the united states has been entailing “ international spill - over effects ” of stimulating its economy at home, due to the rise in u. s. stock prices through the expansion of overseas economies. it is important to note that the unconventional policy measures being implemented in japan and the united states are not undisciplined, unlimited monetary easing. in the case of japan ’ s comprehensive monetary easing, and to clarify that it is after all a temporary and extraordinary policy measure, the asset purchase program has been established and managed on the bank ’ s balance sheet. similarly, in the case of the united states, federal reserve chairman ben s. bernanke emphasized that the large - scale asset purchase program is a short - term policy measure and the federal reserve is committed to achieving medium - to long - term price stability. so far, i have examined monetary policy and its effects on japan and the united states. what has been highlighted as a common factor is that, when market sentiment and confidence have swung excessively in the direction of pessimism, central banks ’ aggressive actions and asset purchases were made to correct that situation and influence risk premiums in a sustained manner. as mentioned earlier, in response to the earthquake, at the monetary policy meeting held at the beginning of last week, the bank decided to increase the amount of the asset purchase program, mainly of the purchases of risk assets, with a view to further enhancing monetary easing. this measure is expected to have an effect similar to the one mentioned above, in that, confronted with an unprecedented earthquake disaster, the measure aims at counteracting any deterioration in business sentiment or an excessive increase in risk aversion, thereby preventing economic activity from deteriorating. while uncertainty is likely to remain high, the measure taken by the bank

contracts and, at times of uncertainty, they would provide a safe haven for investors without triggering financial fragmentation. currently, the supply of risk - free assets in the euro area is very limited, as only the debt of a small group of countries is perceived as riskless. admittedly, a common safe asset cannot replace sound fiscal policies in the member states. but it would weaken the doom loop between sovereigns and banks by reducing incentives for cross - border flights to safety, by contributing to diversification of risk in portfolios held by banks and investors, and, more generally, by providing for a more ample, stable and equitable supply of safe assets for the emu as a whole. a true capital markets union will also attract global institutional investors, strengthening the international role of the euro and providing europe with more geopolitical leeway. crucially, it will help reshape capital markets in europe after brexit. thank you. see p. hernandez de cos ( 2019 ) : " the emu at 20 : from divergence to resilience ”. opening remarks at the banco de espana third annual research conference. https : / / www. bde. es / f / webbde / gap / secciones / salaprensa / intervencionespublicas / gobernador / arc / fic / hdc160919en. pdf