the dodd - frank act in the united states. the tale of u. s. financial markets after 2004, which i have just described, shows how loose regulations went wrong and resulted in bitter consequences. in this regard i fully understand the rationale of such regulatory reforms. having said that, i am afraid that the global debate on these reforms has sometimes been based on the “ wishful thinking ” of a quick return to normality, that is, on the assumption that the new regulatory frameworks would be implemented in the normal times that are supposed to prevail in the immediate wake of a brief crisis. the bank of japan repeatedly cautioned against such wishful thinking, having experienced prolonged problems after japan ’ s financial crisis in the 1990s. the bank warned that downward pressure stemming from financial crises is likely to be persistent, and any signs of recovery observed shortly after the crisis could be a “ false dawn ”. it also emphasized the risk of bank deleveraging and balance sheet adjustment, especially when the adverse impacts of the crisis remain. indeed, what we had to tackle after the crisis was not leveraging and excessive risk - taking by the banking sector, but deleveraging and malfunctioning of credit intermediation. moreover, we had to deal with these problems under severe constraints on macro - policies, with interest rates close to the zero - bound and fiscal balance deteriorating. unfortunately, developments in the global economy after the lehman crisis seem almost to have confirmed our fears. moreover, many advanced economies are now experiencing both the downward pressures associated with financial fragility and the structural adjustment pressures from population ageing. suppose the contrary. when advanced economies were not under severe pressure from population ageing, counter - cyclical fiscal policies were broadly effective because market participants were able to believe that any deterioration in fiscal balance should be temporary and, consequently, a large - scale increase in sovereign risk premiums was avoided. however, the fundamental fiscal balance of many advanced economies is now broadly expected to worsen as a result of population ageing and reduced growth potential. in such an environment, the policy effects of fiscal easing are likely to be substantially reduced by an increase in sovereign risk premiums. thus, i would say “ this time may truly be different ”, mainly because many advanced economies have to tackle widely ranging challenges, including population ageing and the consequent decline in potential growth rate, more intense constraints on fiscal policy and the persistent balance sheet adjustment pressures stemming from the financial crisis. indeed

their behavior premised on deflation and take positive initiatives toward making active investment and raising productivity further. 11 japan has experienced stagnation and deflation for a long time. the bank of japan aims at achieving price stability, thereby contributing to the sound development of the national economy. from now on, when a children's book is written, i would prefer not to see a phrase such as " it is a very difficult place to live because there has been a decades - long stagnation. " thank you for your attention. there are arguments that the stabilization of the macroeconomy in the short term affects economic growth in the long term. for details, see bank of japan, research and statistics department, " minutes of the 7th joint conference organized by the university of tokyo center for advanced research in finance and the bank of japan's research and statistics department : new developments in macroeconomic analysis : interaction between business cycles and economic growth, " boj reports and research papers, 2018, http : / / www. boj. or. jp / research / brp / ron _ 2018 / ron180330a. htm / ( available only in japanese ) ; and souhei kaihatsu et al., " interaction between business cycles and economic growth, " bank of japan working paper series, no. 18 - e - 12, 2018, http : / / www. boj. or. jp / en / research / wps _ rev / wps _ 2018 / wp18e12. htm /. has japan's economy changed? : challenges and prospects speech at the japan society in new york october 3, 2019 masazumi wakatabe deputy governor of the bank of japan outline introduction i. achievements and changes ii. challenges ahead conclusion chart 1 introduction demographics working - age population ( aged 15 - 64 ) total population 2. 0 y / y % chg. 2. 0 y / y % chg. united states united states 1. 5 1. 5 japan 1. 0 1. 0 0. 5 0. 5 0. 0 0. 0 - 0. 5 - 0. 5 - 1. 0 - 1. 0 - 1. 5 - 1. 5 - 2. 0 cy80 - 2. 0 cy 80 japan source : oecd. chart 2 introduction potential growth rate recent developments y / y % chg. developments in the 60s - 80s average y / y % chg. labor