##s attention. second, nonmanufacturing industries, mainly the services sector, are projected to recover at only a moderate pace globally. in this situation, i believe that recovery in the services sector is indispensable to japan's economy returning to an expanding trend given that it has provided substantial support for economic growth over the past several years through business fixed investment, mainly construction investment, and that it has had a growing presence in japan's labor market in recent years. 3. risks to the outlook regarding the outlook for the economy, risks up until the impact of covid - 19 subsides include the following : ( 1 ) the impact of covid - 19 on domestic and overseas economies ; firms'and households'medium - to long - term growth expectations ; and ( 3 ) developments in the financial system. furthermore, attention should continue to be paid to, for example, u. s. china tension, the future consequences of the trade negotiations between the united kingdom and the european union, geopolitical risks, and developments in global financial markets under these circumstances. the risk that i particularly bear in mind is the potential impact on the global economy of the uneven recovery, with the pace varying across countries and regions. at present, many countries and regions have been conducting fiscal and monetary policies in the same direction in response to the globally common shocks, and this appears to have contributed to the stability in financial markets thus far. however, as i stated in my earlier overview, a synchronous global economic recovery comparable to the one in 2017 is unlikely to occur over the coming years. the expectation is that the process of recovery will be long lasting and that the pace will vary widely across countries and regions. in my view, it should be noted that such unevenness could result in differences in policy direction across countries and regions. in particular, as gita gopinath, director of the research department at the imf, has pointed out, the shortfall in gdp growth in 2020 to 2021 relative to pre - covid - 19 growth projections is expected to be larger for emerging and developing economies, except for china, than that for developed economies. in this situation, it warrants attention that the underlying trend in international fund flows could change if the recent global convergence in income level and current account balance turn to divergence once again. in this regard, i believe that measures to mitigate such risk, including the extension of the debt service suspension initiative ( dssi ) for

' sentiment from deteriorating through volatility in asset markets and supporting positive economic activity. in addition to these three measures, the bank has made regulatory responses to ensure financial system stability, including an easing of the leverage ratio requirement it announced with the financial services agency in april. it can be assessed that such responses have produced the intended effects so far ; for example, avoiding the kind of significant tightening of financial conditions that initially had been anticipated. next, i would like to mention two points that i bore in mind in the process leading up to the bank's series of policy decisions. the first is the importance of maintaining accommodative financial conditions, mainly through the provision of ample funds. for example, if the issuance market mainly for cp and corporate bonds were to dry up, as was the case at the time of the gfc, firms might rush to banks to take out large - lot loans, a situation that could result in a further credit contraction. in addition, even though it can be said that financial institutions have significantly increased their robustness compared with the time of the crisis, instability in financial markets will have a considerable impact on their stance on credit provision. i assume that many still vividly recall the experience following the gfc, in which a serious delay was caused in the issuance of letters of credit on international shipments of goods. the second point is the importance of maintaining firms'and households'sentiment and providing financial support to small and medium - sized firms as well as micro firms with a sense of urgency, given that the impact of covid - 19 has sent rapid, enormous shockwaves through a broad range of corporate activities regardless of firm size or business sector. in terms of the former, it is important for the bank to clarify its policy stance, as uncertainty about future developments is extremely high. thus, the bank has changed its forward guidance for policy rates to one stating that it " will closely monitor the impact of covid - 19 and will not hesitate to take additional easing measures if necessary " from the previous one stating that it " will not hesitate to take additional easing measures if there is a greater possibility that the momentum toward achieving the price stability target will be lost. " regarding the latter, i believe top priority should be placed on taking measures to support financial and economic activities, including coordinated actions with the government and overseas central banks. b. future conduct of monetary policy since april 2013, the bank has implemented quantitative and qualitative monetary easing with the aim