second, we are keen that the matching adjustment is put on a sounder footing to support the investment objective and protect policyholders. third, we ’ re looking at a range of changes to simplify and streamline aspects of the regime, including reporting, and thereby reduce the burden on firms, whilst ensuring that the pra continues to receive the level and type of information necessary to supervise firms effectively. an increase in the thresholds at which firms become subject to solvency ii is being considered alongside mobilisation of new insurers, and a review of the standard formula will take place at a subsequent stage. we are keen to engage with the afm and its members on all of these topics. we are committed to continuing this where necessary and working with industry throughout policy development. our collaboration has most recently been demonstrated through the establishment of the regulator - industry steering group and working group on regulatory reporting reform, which i am pleased to note the afm is a member of. we are currently running a quantitative impact study to gather data that will allow us, with government, to formulate effective 4 / 6 bis central bankers'speeches policy proposals. i should emphasise that the scenarios used in the qis are not policy proposals. the qis is complemented by a qualitative questionnaire to support our policy thinking, and our future cost - benefit analysis. high quality submissions from a range of respondents, including mutuals, will be key to the pra ’ s ability to help develop well - evidenced reform. we welcome participation from all firms who are able to submit responses to the parts of the qis and questionnaire that are relevant to your business, by the deadline of 20 october 2021. i am pleased that the afm and some individual mutuals responded to the hm treasury ’ s call for evidence on solvency ii. having mutuals input at this early stage will help inform our policy development. in the deposit - taking sector, a lot of work in relation to mutual deposit takers has been undertaken and benefitted from good engagement between industry and regulator. i am thinking in particular of our simplification of the regime for credit unions. this approach to the removal of unnessary / burdensome regulation is part of the overall work being undertaken by the pra. for friendly societies seeking to merge their businesses, the pra has sought to achieve proportionate outcomes within the parameters of the legislation. this has included waiving the requirement for an independent actuarial report where

perceptions of excess employment still persist, and thus significant changes have not been observed in their efforts to reduce personnel expenses. industrial production is expected to remain on a rising trend, although the pace of increase may slow down further temporarily. this report was written based on data and information available when the bank of japan monetary policy meeting was held on december 15, 2000. the bank ’ s view on recent economic and financial developments, determined by the policy board at the monetary policy meeting held on december 15 as the basis of monetary policy decisions. overall, the economy is likely to follow a gradual upward trend led mainly by business fixed investment, while the developments in overseas economies as well as in foreign and domestic capital markets, along with their effects on the economy, need to be carefully monitored. in addition, the favorable financial environment created partly by the bank ’ s sustaining easy monetary stance and the new economic stimulus package by the government are expected to underpin the economy. with regard to prices, import prices are rising, reflecting an increase in international commodity prices such as crude oil prices. domestic wholesale prices, notwithstanding the rise in prices of petroleum products reflecting the increase in crude oil prices, are declining somewhat mainly due to the decrease in prices of electrical machinery. consumer prices continue to be somewhat weak owing to the decline in prices of other imported products and their substitutes, although prices of petroleum products increased. corporate service prices are still falling slowly. as for the condition surrounding price developments, the balance between supply and demand in the domestic market is projected to be on a gradual improving trend, while an economic recovery is expected to continue moderately. on the other hand, semiconductor prices are declining reflecting softer international semiconductor prices, and crude oil prices, which had been exerting upward pressure on prices, are dropping recently. in addition to the declining trend of machinery prices due to technological innovations, the decrease in prices of consumer goods arising from the streamlining of distribution channels will exert downward pressure on prices. overall, prices are expected to be somewhat weak for the time being. in the financial market, the overnight call rate is moving around 0. 25 percent. as for interest rates on term instruments, euro - yen transactions, tb and fb rates maturing beyond the year - end are rising somewhat. the japan premium remains negligible. yields on long - term government bonds have been on a downward trend since mid - october, having decreased to around 1. 55 percent temporarily, and are recently moving around 1. 65 percent. the yield