on the assumptions that a second wave of covid - 19 will not occur on a large scale and that a resultant reinstatement of the strict public health measures will not take place, but these assumptions entail uncertainties. difference from the global financial crisis before i move on to the next topic, i would like to explain the difference between the current shock and the global financial crisis in 2008. at the time of that crisis, the nature of the problem was that, triggered by the bursting of the global financial bubble, major financial institutions abroad went bankrupt successively and the functioning of the financial system declined significantly. what made the problem worse was a vicious cycle in which a decline in the functioning of the financial system led to deterioration in the real economy, which in turn affected stability in the financial system in the form of an increase in non - performing loans. in contrast, the current shock is caused by the spread of covid - 19. this is the same situation as experienced with the global financial crisis, in that a decline in demand and weak production activity affect corporate financing and that developments in financial and capital markets can easily become unstable due to increasing uncertainties over the outlook for economic activity. however, the big difference between then and now is that the financial system has maintained its stability on the whole this time. since the global financial crisis, efforts have been made internationally to enhance the robustness of the financial system, and thus financial institutions have considerable resilience in terms of both capital and liquidity. because the financial system is stable, the bank's and the government's measures to support financing through private financial institutions can work effectively. under these circumstances, although financing, mainly of firms, has been under stress, the environment for external funding, such as bank borrowing and the issuance of cp and corporate bonds, has remained accommodative ( chart 6 ). issuance spreads for cp and corporate bonds expanded temporarily but have narrowed of late, and the year - on - year rate of increase in their amount outstanding has continued to be at a relatively high level. that in the amount outstanding of bank lending also has registered the highest growth in about 30 years. at the time of the global financial crisis, with the amount outstanding of cp and corporate bonds becoming lower than the previous year due to the strengthening of investors'risk aversion, downward pressure on the real economy from the financial side intensified amid the situation of banks'cautious lending attitudes. however, such developments have been avoided this

time. it is expected that stability of the financial system will not be hampered significantly and the economy will be supported from the financial side. that said, it is necessary to closely monitor future developments because, if the real economy deteriorates for a prolonged period, this could affect the financial system and the vicious cycle that i mentioned earlier could start operating. price developments now, i will explain price developments in japan ( chart 7 ). the year - on - year rate of change in the consumer price index ( cpi ) for all items less fresh food is likely to be negative for the time being. with economic activity remaining at a low level due to the impact of covid - 19, it is expected that prices of goods and services that are sensitive to economic activity will be pushed down. crude oil prices, which declined significantly compared to a while ago, are projected to push down the cpi through energy prices. that said, when excluding the effects of energy prices, the inflation rate has remained marginally positive thus far. the inflation rates for food products and daily necessities that are sold at supermarkets have increased at relatively high levels. although those for some items such as charges for accommodations have shown a relatively large decline, firms'price - setting behavior that aims at stimulating demand through price reductions - - as seen during the deflationary period in the past - - is not observed widely at this point. from a somewhat long - term perspective, with the economy improving, downward pressure on prices is projected to wane gradually and the effects of the decline in energy prices are likely to dissipate. under these circumstances, the year - on - year rate of change in the cpi is expected to turn positive ( chart 5 ). in the latest outlook report, the forecasts of the majority of the policy board members for the cpi are in the ranges of minus 0. 6 to minus 0. 4 percent for fiscal 2020, 0. 2 to 0. 5 percent for fiscal 2021, and 0. 5 to 0. 8 percent for fiscal 2022. thus, the year - on - year rate of change in the cpi is likely to increase gradually. that said, it is unlikely that the inflation rate will approach the price stability target of 2 percent with momentum during the projection period since rapid recovery in demand can hardly be expected. thus far, i have explained the baseline scenario of the outlook for prices, but i would like to note that it is difficult to assess the impact of covid - 19 on