ryuzo miyao : a macroprudential perspective in the conduct of monetary policy speech by mr ryuzo miyao, member of the policy board of the bank of japan, at the 2011 asia economic policy conference, san francisco, 30 november 2011. * * * introduction first of all, i would like to thank the organizer of this conference for inviting the bank of japan and allowing me to exchange views among such distinguished panelists and scholars. today i would like to highlight one of the key issues regarding the conduct of monetary policy, namely a macroprudential perspective in monetary policy making. more specifically, i will discuss how to take into account the risk of accumulation of financial imbalances in the conduct of monetary policy, which could help prevent financial bubbles and subsequent crises. i would also like to introduce our experience and summarize what the bank of japan has done so far in this regard. you may find it somewhat premature to talk about how to prevent future crises given that the world is still struggling in the aftermath of the global financial crisis. however, in order for asia to keep playing a leading role in the global economy, the issue must be of great importance, although i should immediately add that we have not observed excessive financial imbalances in the region. looking back at the period after the asian crisis, we have witnessed a series of incidents that can be deemed crises. it appears that the frequency of such incidents is rising and that efforts to deal with one crisis might have provided the seeds for a subsequent crisis. in the coming years, asia will not be allowed the luxury of simply being pleased with the situation. i. the essence of the global financial crisis as background, let me briefly review the essence of the global financial crisis. although a variety of economic and financial factors are involved, the essence of the global financial crisis is the formation and bursting of the credit bubble. in forming the bubble, the household sector in the united states expanded borrowing and consumption along with the boom in housing prices. on the financial front, new types of transactions such as securitized products and derivatives prevailed, and leverage also increased significantly. such excess in real economic activity, asset prices, and financial markets had a shared influence among each of these components, and this led to further excess that spread beyond national borders, resulting in the global credit bubble. balance - sheet adjustment has continued to constrain recovery in many countries, which is typical after the bursting of a large - scale credit bubble.

such as the present one between policy board members and business leaders and press conferences by the governor after monetary policy meetings, and promptly publishes the minutes of the monetary policy meetings. in addition, the bank makes use of various other communication channels such as its web site as a means of providing information to the public. i think that these efforts do not compare unfavorably with those of other central banks. moreover, the bank is doing its utmost to further improve the quality of such forms of communication. 12 for example, as part of such efforts, the bank launched a renewed web site in january. 13 we this refers to the number of financial institutions that obtained the bank ’ s confirmation for their plans to participate in the new loan disbursement. for information on the bank's previous measures to enhance the transparency of monetary policy, please refer to “ transparency of monetary policy ” on the bank ’ s web site. as part of the renewal of the web site, the content structure was rearranged, the pages were redesigned, and the content was expanded, so that users can access more easily the information they need. for more details, please refer to “ renewal of the bank of japan web site, ” released on january 14, 2011 on the bank ’ s web site. bis central bankers ’ speeches would be delighted to hear your opinions and views regarding the bank ’ s dissemination of information. bis central bankers ’ speeches