denied that banks ’ profits will plunge. the profitability of housing loans also warrants careful monitoring. in addition, consumer loans such as card loans and car loans are an area where potential needs exist over time. with a view to its potential, the major banks have been increasing their capital subscription to consumer credit, credit card, and consumer finance companies. as explained earlier, those affiliated companies have not contributed to increasing the profits of financial institutions, while the future developments in the area of consumer loans warrant attention. lending to small - and medium - sized firms, and provision of risk money third, fund provision to small - and medium - sized firms. firms ’ funding conditions rapidly deteriorated from the autumn of 2008 to the beginning of 2009, and have been recently improving, partly due to the recovery of cp and corporate bond markets. many small and medium - sized firms still view their funding conditions as tight, and the bank considers that the smooth fund provision to small and medium - sized firms continues to be an important challenge for corporate finance in japan. looking at the future of japan ’ s economy, how to provide risk money to small - and mediumsized firms with high technology would be a challenge for the financial system. in that case, it becomes important to apply part of households ’ ample financial assets to risk money. in japan, while the importance of venture capital has repeatedly been argued, it has not grown in a significant manner so far. providing risk money smoothly to firms that have a possibility of leading japan ’ s future economic growth is one important challenge in the area of retail banking. the bank will keep monitoring with strong interest what type of financial institution will play a role of intermediation through what type of channel. concluding remarks the current financial crisis has posed various challenges to the bank of japan. one of them is, from a macroprudential perspective and taking into account the interconnectedness between the real economy and the financial system, to analyze and assess the risk of the financial system as a whole. the bank of japan has been tackling such challenge through financial system report and others, and intends to further enhance its efforts as well as to continue to strive to properly gauge and assess the risk inherent in the financial system. on that basis, the bank considers that how to utilize such assessment in monetary policy or to utilize in further strengthening of financial institutions ’ risk management through on - site examination, off - site monitoring, and the activities of the center for advanced financial technology, would be our next

2 mar. june sept. dec. forecast actual - 5 fy12 notes : 1. in the left chart, figures are for all industries including financial institutions. figures include software and r & d investment and exclude land purchasing expenses. notes : 2. in the upper right chart, figures through fiscal 2018 are actual results. figures for fiscal 2019 are forecasts from the september 2019 survey. notes : 3. in the lower right chart, figures are those of firms with capital of 1 billion yen or more on a consolidated basis. figures for fiscal 2019 are based on staff calculations using figures adjusted for the average of changes from planned to actual expenditure in fiscal 2012 - 2018. sources : development bank of japan ; bank of japan. chart 5 i. economic developments private consumption s. a., cy 2011 = 100 consumption activity index ( travel balance adjusted, real ) cy 12 note : figures exclude inbound tourism consumption and include outbound tourism consumption. sources : bank of japan, etc. chart 6 i. economic developments employment and income situation active job openings - to - applicants ratio and unemployment rate 7 s. a., % unemployment rate ( left scale ) employee income s. a., ratio 1. 8 1. 6 active job openings - to - applicants ratio ( right scale ) 1. 4 y / y % chg. 1. 2 - 2 1. 0 total cash earnings - 4 number of employees 0. 8 0. 6 cy 04 0. 4 employee income - 6 - 8 note : in the right chart, q1 = march - may, q2 = june - august, q3 = september - november, q4 = december - february. employee income = total cash earnings ( " monthly labour survey " ) × number of employees ( " labour force survey " ). sources : ministry of health, labour and welfare ; ministry of internal affairs and communications. chart 7 i. economic developments boj's economic forecasts real gdp < october 2019 outlook report > s. a., ann., tril. yen fiscal 2021 + 1. 0 % fiscal 2020 + 0. 7 % fiscal 2019 + 0. 6 % fy 12 note : forecasts are the medians of the policy board members'forecasts ( point estimates ). sources : cabinet office ; bank of japan. chart 8 ii. price developments consumer prices and output gap % y / y % chg. output gap ( left scale ) cpi ( less fresh food and energy, right scale )