/ www. ffiec. gov / y2k. we have also produced a ten - minute video entitled “ year 2000 executive awareness ”, intended for viewing by a bank ’ s board of directors and senior management, which presents a summary of the year 2000 five - phase project management plan outlined in the interagency policy statement. the video can be ordered through the board ’ s web site. international awareness early in 1996, the federal reserve began to have concerns about international progress on the year 2000. informal discussions within the bank for international settlements ( bis ) committee on banking supervision indicated that the year 2000 was not then a priority in many countries. that has now changed. we are working intensively through the committee, which is composed of many international supervisory agencies. through formal and informal discussions, the distribution of several interagency statements, advisories, and the federal reserve ’ s year 2000 video, we have sought to elevate bank supervisors ’ awareness of the risks posed by the century date change. the g - 10 central bank governors issued an advisory in september, that included a paper by the bank supervisors committee on the year 2000 challenge, to ensure a higher level of awareness and activity among leading bankers. if you have not seen it, i commend it to your attention. federal reserve speakers have been featured in a number of year 2000 conferences and are looking for others wherever they can be found or promoted. we also participated in a bis meeting for g - 10 and major non - g - 10 central banks in september which provided a forum to share views on, and approaches to, dealing with year 2000 issues. the majority of those present seemed confident that payment and settlement applications under their management would be ready, but the approach of many central banks toward raising industry awareness in their countries varies widely, and little is known about preparations in smaller emerging nations. these efforts within the bis have confirmed what we had been hearing anecdotally from u. s. financial institutions and from the u. s. branches and agencies of foreign banks. reportedly, many foreign banks continue to be less focused on the year 2000 than prudence might suggest. many organizations appear to be underestimating how important and difficult effective preparation is to a successful year 2000 effort. to broaden the base of global supervisory awareness of the issue, the basle supervisors are working with securities and insurance authorities to sponsor additional activities, and i understand that final arrangements are now being made to hold a large meeting for financial supervisors from

. ii. the bank's monetary policy next, i will talk about the bank's monetary policy. a. quantitative and qualitative monetary easing ( qqe ) with yield curve control at the monetary policy meeting held in september 2016, with a view to achieving the price stability target of 2 percent at the earliest possible time, the bank decided to introduce qqe with yield curve control as a means of strengthening the framework for monetary easing. this consists of two major components. the first is an " inflation - overshooting commitment " in which the bank commits itself to continuing to expand the monetary base until the year - on - year rate of increase in the observed cpi exceeds the price stability target of 2 percent and stays above the target in a stable manner. japan's economy has suffered from deflation for more than 15 years, since the late 1990s, with the yearon - year rate of change in the cpi being about zero or slightly negative. it seems that one of the reasons why it has been taking time for the deflationary mindset to be dispelled in japan is that households and firms have been adaptive to the deflationary environment. given this, i believe it is important that the bank demonstrate its unwavering determination through such a commitment so that the perception that prices of goods and services are supposed to go up every year by around 2 percent becomes firmly entrenched among people. the second component is " yield curve control " in which the bank controls short - term and longterm interest rates. in the current framework, it sets the short - term policy interest rate and the target level of the 10 - year japanese government bond ( jgb ) yields as its operating targets. at present, in the guideline for market operations, the bank sets the short - term rate at minus 0. 1 percent and the target level at around 0 percent, and conducts jgb purchases so as to achieve this target level. almost a year has passed since the bank introduced qqe with yield curve control. under this framework, the yield curve has been formed smoothly so far in a manner consistent with the guideline for market operations. since the introduction of qqe in 2013, the basic transmission channel of monetary easing has been the reduction in real interest rates, and the current framework - - qqe with yield curve control - - is designed to amplify monetary easing effects when the outlook for economic activity and prices improves. in that case, there