powerful monetary easing. b. policy measures in march : enhancement of fund - provisioning measure to support strengthening the foundations for economic growth at the subsequent monetary policy meeting in march, the bank decided to enhance the fundprovisioning measure to support strengthening the foundations for economic growth ( hereafter referred to as “ the growth - supporting funding facility ” ). the growth - supporting funding facility supplies long - term funds at a low interest rate to financial institutions in accordance with their efforts – in terms of lending and investment – toward strengthening the foundations for economic growth. looking at the composition of the areas to which financial institutions have been lending and investing using this facility, “ environment and energy business ” and “ medical and nursing care business ” accounted for a large share. let me share with you some examples of actual lending or investment based on information made public by financial institutions. for example, there was a project in which the manager of a nursing home for the elderly upgraded the air - conditioning system to an eco - friendly one that recovered waste heat. in another case, food manufacturers made investments for the purpose of expanding their production sites in emerging asian economies, so as to respond to vigorous demand from such economies. taking into account the lending and investment conducted under the facility, the bank decided to establish special rules, first, for a new lending arrangement for small - lot investments and loans and, second, for a new u. s. dollar lending arrangement for foreign currency - denominated investments and loans. the bank also decided to increase the maximum outstanding balance of loans under the main rules for the facility, which raised the overall outstanding balance of loans available through the facility by 2 trillion yen. the bank also decided to extend the deadline for applications for new loans under the facility, by two years. such measures are aimed at further enhancing the bank ’ s efforts to strengthen growth potential, which is another pillar for overcoming deflationary pressures. bis central bankers ’ speeches iv. has the bank changed? the series of policy measures by the bank – especially its decision in february to clarify its policy stance and further enhance monetary easing – took many market participants by surprise, since few had predicted such responses. following the bank ’ s decision, stock prices rose and the yen depreciated. these developments were of course significantly influenced by some new positive worldwide developments at that time, such as diminishing perceived risks from the european debt problem and relatively firm improvement in the u. s. economy. in addition, i believe that

the bank ’ s clarification of its policy stance, which was taken as a positive surprise, also had a considerable impact on those market developments. i am often asked whether the bank ’ s policy objectives, basic thinking behind the conduct of monetary policy, and policy stance have changed since its decision in february. next, i would like to outline my understanding of what has changed and what has stayed the same with regard to the bank ’ s policy conduct. a. question : has the aim of the bank ’ s monetary policy changed? with regard to the introduction of “ the price stability goal in the medium to long term ” in february, a frequent interpretation is that the bank has finally adopted the so - called “ inflation targeting framework ”. i would like to outline my reflections on this point by asking the following question : “ has the aim of the bank ’ s monetary policy changed? ” the bank ’ s basic thinking about the price stability that a central bank should aim to achieve includes the following three elements. first, “ price stability ” is a state where economic agents such as households and firms may make decisions regarding economic activities without being much concerned about the fluctuations in the general price level. second, central banks should pursue “ price stability ” over the medium to long term that should not be judged by short - term developments in the recent period. third, “ price stability ” should be expressed in numerical terms using indicators that cover goods and services consumed by households and represent the public ’ s true feelings regarding price developments. this basic thinking had been explained to the public before the introduction of “ the price stability goal in the medium to long term ”, and has not changed with this introduction. that being said, i believe that the introduction of “ the price stability goal ” in place of the old “ understanding of medium - to long - term price stability ” is significant as an effort to specifically express what the bank pursues based on its basic thinking on price stability. when conducting monetary policy, each policy board member makes decisions based on their own thinking on price stability that should be pursued by the bank. the old “ understanding ” showed the range of inflation rates that each policy board member understood as numerically expressing price stability over the medium to long term. there should be no confusion, since if inflation rates fail to be within this range, then it is obvious that price stability has not been achieved from any of the members ’ perspectives. however, there was a criticism that the old “ understanding ”, which was