merely considering these changes as constraints. accompanied by the improvement in the employment and income situation. in what follows, i will explain the effects of the monetary easing since 2013, by describing changes in financial conditions and its impact on economic and price developments. let me start with the changes in financial conditions. since the introduction of qqe in 2013, japan's interest rates have declined significantly. the decline in interest rates has stimulated the private sector's credit demand and improved financial institutions'lending attitudes. these have resulted in a clear increase in the amount outstanding of funding in the private sector ( chart 5 ). there is considerable evidence that the financing environment for firms has improved considerably under the monetary easing. i will move on to the effects of the monetary easing on economic activity and prices. it can be said that it has led to an upturn in the economic and price situation by, for example, producing accommodative financial conditions and influencing people's expectations, as well as through a resultant rise in asset prices. since the actual economic and price conditions are subject to various factors, it is not easy to quantify the effects of the monetary easing alone. that being said, let me introduce one simulation of how economic activity and prices would have developed since 2013 if the bank's qqe had not been introduced ( chart 6 ). although the estimation results should be interpreted with a certain latitude, this analysis suggests that ( 1 ) qqe has strongly stimulated economic activity and prices through, for example, a decline in interest rates, and ( 2 ) without qqe, it is highly likely that the current situation where japan's economy is no longer in deflation could not have been achieved amid a continuous shortage in demand. 2 the simulation shown in chart 6 is based on a vector auto - regressive ( var ) model consisting of the following variables : the monetary base, interest rates for different maturities, the output gap, the consumer price index ( cpi ) excluding fresh food and energy, and the foreign exchange rate. the future path of the output gap and the cpi was simulated assuming that there had not been any shocks on interest rates or the monetary base. the results are generally consistent with those presented in the bank's comprehensive assessment released in september 2016, which estimated the effects of qqe on economic and price developments based on a large - scale semi - structural model of japan's economy. the effects of the monetary easing are exerted so indirectly

prof. dr. claudia m. buch vice - president of deutsche bundesbank financial literacy and financial stabilityi speech prepared for the 5th oecd - gflec global policy research symposium to advance financial literacy paris, 18 may 2018 seite 1 von 27 deutsche bundesbank, directorate general communications wilhelm - epstein - strasse 14, 60431 frankfurt am main, germany, tel : + 49 ( 0 ) 69 9566 3511 or 3512, fax : + 49 ( 0 ) 69 9566 3077 presse @ bundesbank. de, www. bundesbank. de reproduction permitted only if source is stated. abstract financial ( il ) literacy is an important channel through which financial instabilities can arise. yet financial literacy is not a sufficient condition for financial stability. even if all actors in financial markets are fully financially literate, they may ignore the impact of their own decisions on the functioning and stability of the financial system. this has implications for academia and central banks. further analytical work is needed to understand the link between micro - decision making and macro - economic outcomes. academia can also contribute to designing good policy evaluation studies and improving teaching of financial stability. for central banks, acknowledging the role of communication for financial stability is important. while policies related to financial consumer protection and financial stability need to be delineated in order to ensure accountability and transparency, synergies between these policy areas can be exploited. this includes developing common narratives, common data strategies, and frameworks for policy evaluation. motivation well - functioning financial markets can have significant positive welfare implications. for the individual, saving and borrowing allow consumption to be smoothened over time and across states of nature. wealth can be accumulated over time by the power of compound interest. differences in financial literacy across individuals can thus be a relevant factor behind differences in wealth across individuals ( lusardi, michaud, mitchell 2017 ). not least, good financial planning helps ensure financial independence. for society as a whole, well - functioning financial markets contribute to growth, allow innovative projects to be financed, and risks associated with these projects to be shared and diversified. in order to reap these benefits, individual market participants must have a basic understanding of relevant financial concepts, and appropriate regulations must be in place in order to prevent the build - up of risks in the financial system. the household sector is particularly important in this regard, given that credit - driven business cycles often operate through household demand ( mian and