international competition in terms of geography, in that it is located in asia, which is the driving force behind global economic growth. japan also enjoys sophisticated “ soft power, ” as exemplified by the credibility of made - in - japan products and courteous service. moreover, as i mentioned earlier, the great advantage at present is that financial system stability is being maintained in japan, unlike in the united states and europe. the results of various surveys including the bank ’ s tankan ( short - term economic bis central bankers ’ speeches survey of enterprises in japan ) show that the lending attitude of japanese financial institutions has recovered to a level exceeding the average since 2000, despite the strains in financial markets around the world. in the past, japan alone suffered from the disposal of nonperforming loans, and the weakness in the financial sector dragged down economic activity. however, on the back of their sound balance sheets, i believe that japanese financial institutions at present are able to effectively provide support to firms ’ strategic efforts. this embodies the strength of japan. if firms and financial institutions reconcile their growth strategies, they will discover ideas and methods for exploring new markets. iv. the bank ’ s conduct of monetary policy in my remarks today, i first mentioned the outlook for japan ’ s economy and noted that it is likely to return to a moderate recovery path. in terms of points to be kept in mind concerning the outlook, i then talked about the sovereign debt problem in europe and challenges regarding the medium - to long - term growth potential of japan ’ s economy. the bank, in recognition of such outlook and risks, has been pursuing powerful monetary easing under the framework of comprehensive monetary easing ( chart 10 ). this framework has the following three pillars. first, the bank sets the policy rate at 0 to 0. 1 percent, which can be deemed a virtually zero interest rate. second, the bank is publicly committed to continuing this virtually zero interest rate policy until it judges that price stability is in sight. and third, as an exceptional measure for a central bank, it purchases from the markets not only long - and short - term government bonds but also risk assets such as cp, corporate bonds, and exchange - traded funds ( etfs ) and japan real estate investment trusts ( j - reits ). a program for purchasing financial assets, called the asset purchase program, started at 35 trillion yen, but has been repeatedly expanded in size on a significant scale. last week, on october 27, the bank decided to

of japan. there is also an issue of whether the global capacity to supply energy and food will manage to continue to meet the robust demand from emerging economies. as i have described, every country and every region in the world has its own challenges. japan, for its part, needs to positively tackle its challenges without falling into pessimism. the biggest challenge for japan is to raise its growth potential. as the working - age population is declining, future generations cannot maintain the current high standard of living unless labor productivity is improved. as you may know, labor productivity is added value, or the sum of wages and profits, divided by labor input. based on this definition, productivity growth is made possible by providing goods and services for which people are willing to pay. without such efforts, economic growth cannot be achieved. japan can be called an “ advanced country ” in the sense that it has faced various challenges ahead of other countries. that is why japan, if it explores visionary solutions to address natural environment problems, energy constraints, and the declining and aging population, will be able to contribute to the advancement of the global economy as well as determine new growth strategies for itself. in the kansai region, there are many firms whose advanced technologies have a large global market share in various areas such as the natural environment and energy, medical and nursing care, high - tech manufacturing, and high - end materials. the region also offers a number of tourist attractions ; for example, five world heritage sites designated by the united nations educational, scientific and cultural organization ( unesco ). in addition, the region is easily accessed from other asian countries. there are new initiatives that convey the region ’ s abundant spirit in tackling challenges, such as the broad - based collaboration between industry and academia across prefectural boarders. the bank places its hope in and will provide support for the region ’ s efforts so that innovations as well as business models created in the region will help activate japan ’ s economy. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches