until recently, this did not manifest itself in the form of labor shortages, since labor demand has been sluggish, so that the problem was not sufficiently addressed. fortunately, during the current economic recovery, labor force participation rates, in particular those of women and the elderly, have been rising ( chart 8 ). it is critical to ensure that this phenomenon is not a cyclical one, but becomes permanent by creating a work environment favorable to women and the elderly in order to mitigate labor force shortages over time. utilization of foreign workers also deserves consideration. another way to mitigate future labor shortages is to prompt investment in labor - saving technology and research and development for such investment. all of these issues are incorporated in the government ’ s growth strategy. if, despite the delays, the strategy is implemented in a steady fashion, japan ’ s economy will regain its vitality and achieve sustained growth. i have talked about japan ’ s labor market, focusing on the effects of balance sheet adjustments, deflation, and demographic changes. while some of these problems are unique to japan, the issues i discussed may nevertheless be of relevance for the challenges faced by other countries today or in the future. i hope that japan ’ s experience can provide a helpful reference in this regard. thank you for your attention. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches

this was the way higher term funding spreads in money markets were observed in many countries, even those whose exposures to the problem assets were trivially small ( i include in this group my own country and some others in this time zone ). in many short term money markets, the spreads between overnight rates and 90 - or 180 - day rates rose significantly, even though not as much as in the united states, the united kingdom or the euro area. these spreads reached extremes in most cases during september and october 2008, in the midst of the turmoil following lehman ’ s failure. in some cases, turnover in money markets dropped sharply, almost to zero, for anything other than overnight maturities. an important dimension of this phenomenon was the shortage of dollar liquidity for non us entities trying to fund their us asset positions. the pressure this placed upon swap markets ultimately saw them effectively close for a couple of weeks during september. in response to these spillovers, central banks did two things. first, they adapted their own domestic policies for provision of liquidity, responding to the unusual term spreads by widening the classes of assets in which they would transact, being prepared to push the amount of cash in the system higher than normal, lending on a collateralised basis at longer terms and in some instances providing foreign currency from their reserves to swap markets. second, central banks stepped up their collaboration in recognition of the mutual dependence of national financial systems. the federal reserve co operated with central banks in a number of countries to provide us dollar funding against local currency collateral, with the central banks in effect acting as intermediaries. this alleviated the us dollar liquidity problems. subsequent further expansions of these facilities in the united states and europe have, for all practical purposes, made the dollar liquidity shortage a thing of the past. ( of course, counterparty risk aversion remains to some extent, which would explain the fact that term spreads remain higher than prior to the crisis – but that reflects questions over the perceived riskiness of the major institutions, rather than liquidity per se. ) on top of this, there was also the co ordinated interest rate reduction by the g10 central banks in october. and in asia, there have been further developments of bilateral and multilateral swap agreements. the second complication for several countries is that some of the transmission channels of monetary policy are not working normally. in the boom, optimism and the search for yield pushed down the risk premia that were built into