allow their participants to mitigate the costs associated with risk control measures ( e. g. cross - margining ) ; • central counterparties use payment systems and other infrastructures operated by central banks to carry out their activities. for these reasons, central banks closely follow and contribute to the discussions related to central counterparty clearing. this conference is an important element in this respect. let me now outline a few central points of this discussion. central counterparties must have adequate risk management procedures. central counterparties play a systemically important role in many financial markets. the failure of a central counterparty can severely disrupt financial markets. central counterparties are highly specialised in managing risks and failures have been rare. nevertheless, there is no room for complacency, and any efforts to improve risk management methods are most welcome. as mentioned already several times in this conference, in november 2004 the g - 10 central banks and the iosco issued a report which set out 15 comprehensive international recommendations for promoting the safety and efficiency of central counterparties. the escb - cesr working group is working in close cooperation with eu ccps to adapt these recommendations to the european context. academic research can provide additional hints on the specific situations which are targeted by the recommendations. this has been shown at this conference by alejandro garcia and ramo gencay or john cotter and kevin dowd with their approaches to extreme market events, and by froukelien wendt in her survey on intraday margining. the governance structure of central counterparties should in principle be market driven. the governance structure may have a significant influence on, for example, risk management and other strategic decisions of central counterparties, as pointed out by thorsten koeppl and cyril monnet. although the optimal governance structure cannot be defined ex - ante, the markets may in many cases be in a good position to identify and produce it. public authorities must, however, step in whenever market failures become significant. in this respect, the ecb supports the views expressed in the cpss - iosco recommendations according to which governance arrangements for a ccp should be clear and transparent in order to fulfil public interest requirements, support the objectives of owners and participants and, in particular, promote the effectiveness of a ccp ’ s risk management procedures. the features of post - trading structure should also in principle be market driven. we are witnessing fast developments in the field of financial market infrastructures, especially in europe, but also in other parts

will fail to significantly improve its labor productivity due to firms ’ passive stance toward fixed investment, thereby making wage increases unsustainable. as for firms ’ stance toward fixed investment, i would like to add that, although investment continues to be made mainly for replacement and maintenance, it is encouraging that their positive actions are being observed in investment to promote rationalization and labor saving, and in that for product upgrades ( chart 11 ). reflecting recent developments in the foreign exchange market, some firms have begun to review the balance between domestic and overseas production. firms ’ decision on production network strategies is not directly affected by short - term factors such as exchange rate movements, because it is based on a longer - term outlook. it is therefore unlikely that they will start shifting production back to bis central bankers ’ speeches japan immediately in response to the recent market developments. however, their decision may change as firms review the medium - to long - term outlook for the exchange rate, and as a result gain confidence that the yen will not appreciate to the extremely high levels seen in the past. ii. monetary policy for the immediate future a. expansion of quantitative and qualitative monetary easing ( qqe ) at the monetary policy meeting held on october 31, 2014, the policy board decided to expand qqe. as i cast a dissenting vote on this decision, i may be in a delicate position to talk about this policy change. i will therefore provide my views to the best possible extent. first of all, i judged that additional monetary easing was not necessary. this is because, in my view, the virtuous cycle of economic activity and prices is basically being maintained, as i have mentioned. for the time being, the year - on - year rate of increase in the core cpi will be in the range of around 1 percent to slightly below 1 percent, as the effects of a decline in energy prices outweigh the effects of the yen ’ s depreciation. this may suggest that the achievement of the 2 percent price stability target now seems to be somewhat far away. in my view, the bank ’ s decision of additional monetary easing aims at offering a kind of insurance against such downside risks to prices. to be sure, i consider that the underlying trend in prices is more important than monthly fluctuations in price indicators. in this regard, the declines in international commodity prices, such as the recent decline in crude oil prices, will surely exert downward pressure on the core cpi. on the other