been slowing gradually. on the other hand, consumer prices continue to decline at a moderate pace. with regard to the outlook, the slower growth in imports of consumer goods is expected to alleviate the downward pressure on prices to some extent. however, as i mentioned earlier, momentum for a recovery in domestic private demand is expected to be weak, and factors such as technological innovation, deregulation, and streamlining of distribution channels will continue to restrain prices. given the situation, prices as a whole are expected to follow a moderate downtrend for the time being. ii. financial developments financial markets were unstable toward the end of march 2002, reflecting market participants'nervousness due to growing concern about the stability of the financial system in the period immediately before the removal of blanket deposit insurance. regarding corporate financing, the lending attitude of private banks became more cautious, and the financing conditions of firms with high credit risks, especially small firms, gradually became more severe. governor hayami made a statement regarding the semiannual report on currency and monetary control for the second half of fiscal 2001 before the committee on financial affairs, house of councillors, on july 4, 2002. financial markets have gradually regained stability on the whole since april 2002, as the economy improved slightly. in the corporate bonds and cp markets, the issuing environment has been improving recently. this suggests that investors'stance toward taking credit risk is starting to improve. financing conditions of firms with relatively high credit risks, however, remain severe. hence, developments in the behavior of financial institutions and corporate financing continue to require close monitoring. japanese stock prices have been somewhat weak since mid - june 2002, reflecting the fall in u. s. stock prices. the yen has become stronger against the u. s. dollar. if these developments go so far as to cause financial markets to become significantly unstable, japan's economy, which is on an improving trend, will be negatively affected. thus, developments in financial markets also require close monitoring. iii. recent conduct of monetary policy the bank adopted a new framework for money market operations at the monetary policy meeting in march 2001. the main operating target was the " quantity " of liquidity, i. e., the amount of the outstanding balance of current accounts at the bank as the uncollateralized overnight call rate had declined to low levels close to zero percent and there was hardly any room left for further easing using orthodox monetary policy measures. under the new framework, the bank has been conducting drastic monetary easing,

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