the bank expresses its idea of price stability in the form of the “ understanding, ” and each policy board member ’ s “ understanding ” falls in a positive range of 2 percent or lower, centering around 1 percent. the third component of comprehensive monetary easing is the bank ’ s establishment of the asset purchase program ( hereafter the program ) through which it provides longer - term funds at a fixed rate and purchases various financial assets – namely, government bonds, cp, corporate bonds, exchange - traded funds ( etfs ), and japan real estate investment trusts ( j - reits ). the program aims at enhancing monetary easing effects by directly influencing longer - term market interest rates and various risk premiums in order to reinforce the indirect easing effects on those variables from the policy interest rate. the program started with a size of about 35 trillion yen in october 2010. at the monetary policy meeting ( mpm ) immediately after the earthquake, when an economic downturn was concerned, the decision was made to increase the amount of asset purchases, mainly of risk assets, which bis central bankers ’ speeches brought the total size of the program to about 40 trillion yen. following the decision on the total size of the program, the bank is steadily conducting asset purchases. the purpose of comprehensive monetary easing, which consists of the three components i have mentioned, is to support economic activity such that japan ’ s economy will be able to achieve sustainable growth with price stability. as i noted earlier, the most fundamental challenge japan ’ s economy faces is the decline in growth potential, and the so - called “ deflation issue ” is a manifestation of this fundamental problem. deflation can be metaphorically expressed as a decline in body temperature, and it should be addressed by the strengthening of growth potential, or basic physical fitness. in this regard, the bank has been implementing the fund - provisioning measure to support strengthening the foundations for economic growth. through the measure, the bank provides long - term funds at a low interest rate to financial institutions that are making efforts in terms of investment and lending to increase the growth potential of japan ’ s economy. the funds amount to 3 trillion yen in total and are provided against collateral deemed eligible by the bank, such as government bonds. at the june mpm this year, the bank decided to establish a 500 billion yen new line of credit for the measure. with regard to the new line of credit, the bank decided to support financial institutions ’ efforts, focusing on loans with equity - like features

burden, both to the banks and the taxpayers. meanwhile even though the banking system still has 15 % of the npl left on their books. however, much of this has already been fully provided for in their loan loss reserves. the banks are therefore now poised to resume lending, and the restructured debtors are once again eligible to borrow. ladies and gentlemen, the big question is of course – is this sustainable? 2003 is fraught with so much uncertainty. the most important risk at the moment is from the external sector, namely, tension between the us and iraq. if this conflict aggravates into a war, it may delay the global recovery process. if the situation prolongs and gravely deteriorates, there could be even greater risks posed to world demand and ultimately the demand for thai exports and tourism. at the same time, a possible upward pressure on the price of oil could have some adverse impact on an oilimporting country like thailand, affecting not only the cost of production but also consumer and business confidence. the domestic components, however, look set to continue their strong courses. the high confidence levels by both the consumers and the businesses should ensure that domestic demands for both consumption and investment continue to expand. the repair that had been made to the balance sheets of commercial banks – and many of them are now back to making substantial profits – should allow them to once again serve the economy. the improvement in debt equity ratios of many private companies also opens the road for them to start thinking up new investment projects. even on the external components, the fact that asian countries have been trading more and more among themselves can also help shield them from temporary turbulences in the american and european economies, should there be any. our gdp growth forecast for 2003 is between 3. 5 to 4. 5, with both core and headline inflation at 0. 5 – 1. 5. this is in fact a forecast that has taken into view of the uncertainty caused by the possible war. therefore, if the external environment does not deteriorate much from the present trend, if the war is brief and limited in scope, our forecast has a significant upward potential, and growth could actually be higher than 4. 5 percent. but the biggest question in your mind is perhaps how does the government plan to manage its financial obligations, since a large part of the gdp growth in the past year did come from fiscal stimulus. in this respect, i can inform you that the government has made it very clear