% category i higher than the rate for category ii category absolute value of the short ‐ term policy interest rate 0. 1 % ii category iii purchase only etfs tracking the tokyo stock price index ( topix ) financial system and bank examination dept. staff will make a briefing at the mpms when the outlook report is decided ( four times a year ). 0 % lower than the rate for category ii eligible fund ‐ provisioning measure • special operations in response to covid ‐ 19, when funds are provided against loans made by financial institutions on their own • special operations in response to covid ‐ 19, when funds are provided against loans other than those for category i and against private debt pledged as collateral • • loan support program operation to support financial institutions in disaster areas ⇒ enable the bank to cut short ‐ and long ‐ term interest rates more nimbly while considering the impact on the functioning of financial intermediation in addition, adjustments to the complementary deposit facility will be made to narrow the gap between the actual policy ‐ rate balances and the " hypothetical " policy ‐ rate balances.

however, that i am not insisting on a simple shift from bank - dependent financing to capital - market - dependent financing. we will not be able to identify an optimal system for corporate financing by perfunctorily repeating such questions as : “ which is more desirable, financing mainly from banks or from capital markets? ” for business projects to contribute to economic growth, there has to be someone collecting and analyzing data about these projects, and assessing the risks involved and the likely rates of return. no matter how we change the overall structure of the financial system, we will always require somebody to perform this fundamental role. what is called for at present is a complete revamping of the ways in which information on risk and return is gathered and dealt with, as an integral part of building a new system of corporate governance to replace the main bank system. japan is not the only country that is searching for alternative forms of corporate governance. in the past, u. s. firms were seen as providing the role model for corporate governance. however, in the wake of a series of incidents such as the failure of enron, they too appear to be entering a new phase of corporate governance. as a result there is no particular textbook model that we can apply to for guidance regarding corporate governance, and we must work hard to produce an original one. iii. recent developments in corporate finance over the past few years there have been a number of new developments in the area of corporate finance in japan that seem to signal further changes in the future. first, firms have been reducing their levels of debt. this has been a major trend since the 1990s. the corporate sector has registered a net surplus since fiscal 1998, with savings exceeding investment, and the outstanding amount of loans extended to firms by banks has decreased on a net basis since 1994. the straightforward reasons for these debt reductions have been firms'need to get rid of the excess debts built up during the asset price bubble in the late 1980s, and also the increasing difficulty of finding new investment opportunities in the years of economic downturn. more fundamentally, both firms and banks have become increasingly aware of the need to optimize their capital and liability structures to adapt to changes in the economic environment. for firms this involves carefully assessing the risks and returns associated with projects, as well as recognizing the need to achieve an optimal structure in terms of their relative holdings of capital and interest - bearing liabilities. meanwhile, banks are striving to enhance their risk management by taking better note