it difficult for us to address business cycles. furthermore, the neutral rate may continue to stay low, due to the long - term factors such as population aging, declining productivity and increasing preference for safe assets. thirdly, we now need to consider outward spill - overs of one ’ s monetary policy, together with the “ spill - backs ” to one ’ s own economy. countries now have closer trade and financial relations than ever, so that the impact of major economies ’ policies on international financial markets and the world economy comes back to influence themselves. for instance, we saw in 2013 during the taper tantrum that the fed ’ s signal to change its monetary policy stance caused sudden capital outflows from emerging economies and global financial market unrest. recently also, the us interest rate hikes and the stronger us dollar have contributed to financial unrest in some emerging economies. as advanced economies normalize their monetary policies going forward, these sudden capital outflows and market unrest can recur at any time. these changes in the monetary policy conditions pose challenges shared by many countries. 1 / 2 bis central bankers'speeches across the world, we see considerable amount of ongoing discussion about how central banks should respond. hoping to see a similarly valuable discussion in this conference, i would like to make a few remarks. first of all, we will have to find ways to keep monetary policy effective even in this new environment. when central banks in advanced economies saw policy rates reach the zero lower bound, they mobilized a variety of unconventional measures. we yet need further research that details the conditions for successful large - scale asset purchases, forward guidance and negative interest rates, as well as their long - term effects. we also need to talk about whether countries other than those with a key currency can use such unconventional measures as part of the monetary policy toolkit, and if not, about what are their policy alternatives. moreover, to keep our policies effective, we will have to work even further on communication. people feel greater uncertainty about our policies as both the policy environment and the responses are changing, possibly making our monetary policy less effective and less credible. central banks need to communicate their policies more actively to reduce these uncertainties and manage peoples ’ expectations. we also need to think about how we can do so more efficiently, given today ’ s widespread use of online and social media. additionally, we need to realize the limitations of monetary policy and actively pursue a proper policy mix. in general, government spending does not crowd out demand by

much during demand slowdowns as it did not, for example, right after the financial crisis, so that an expansive fiscal policy together with accommodative monetary policy can achieve macroeconomic stability more effectively. macroprudential policy is crucial as well. in a low - growth low - inflation environment, financial imbalances are likely to build up as the monetary policy tends to mainly aim at economic recovery. to secure financial stability － another important goal of monetary policy － it is indispensable to coordinate monetary policy with macroprudential policy. honored guests, ladies and gentlemen! due to the recent changes in economic structures and financial environment, our monetary policy is facing new challenges never experienced before. i look forward to seeing here － through the active exchange of your views for two days － many policy options proposed to help overcome the challenges that monetary policy is facing. and i hope that all of us, at the end of the conference, will have gained some profound insights about how central banks will continue to evolve into the future. thank you. 2 / 2 bis central bankers'speeches