accumulated in the central banks are managed, and how the central banks assess the financial risks involved. this knowledge strengthens the support of the policies of central banks. since the beginning of the financial crisis, the ecb and the eurosystem have made a lot of progress in the transparency of the balance sheets. in particular, the content of the on - going asset purchase programme is made public, on a country - by - country and security - by - security basis. at the same time, we must always put financial risks in central banking in the broader policy context and take into account the objectives and results of such policy. in general, disclosure is necessary, but not enough. central banks need to ensure that the political decision - makers and the general public understand what the central banks are doing and why. deep and coherent participation by the central banks in the public economic debate at the national and euro area level is needed. * * * transparency is useful also for other reasons besides retroactive accountability. it is important for policy effectiveness. monetary policy is largely about managing expectations. in order for monetary policy to do its job smoothly, it is important that the market participants understand the intentions of the central 2 / 3 bis central bankers'speeches bank. this, in fact, makes communications the first, although not the ultimate instrument of monetary policy. in monetary policy, communication is an active form of transparency : transparency about the current interpretation of the economic situation, and about the goals and intentions of the central b a n k. charles evans spoke about the distinction between “ delphic ” ( or predictive ) communication and “ odyssean ” ( committing ) communication, where promises are involved. these terms were recently discussed by ben bernanke in his speech and paper about monetary policy in a new era. 4 at present, the role of communications is especially large, because of the increased reliance of central banks on forward guidance. when forward guidance is credible, it adds an important instrument to the central bank ’ s toolbox. it has proven useful, especially when the room of movement for the principal instrument of monetary policy – the interest rate – is restricted by the zero lower bound. using the chicago terminology, the ecb took an odyssean step in 2013 when it started to use forward guidance regarding its future interest rate policy. later, the degree of precision and commitment in the ecb ’ s forward guidance went further when the large - scale asset purchase programme was launched in 2015. forward guidance in

shown by the fact that the year - on - year growth rate for the april – june quarter, which was released in july, registered 7. 5 percent. the economy has faced downward pressure, such as a slowdown in the real estate market, as authorities have been progressing with structural reforms. on the other hand, the slowdown in growth momentum observed since the beginning of the year has come to a halt due partly to the economic stimulus measures that the authorities have been implementing since the spring. as for the outlook, the chinese economy is likely to continue to see stable growth, albeit at a slightly slower pace. emerging and commodity - exporting economies – mainly the asean economies that are japan ’ s major export destinations – have continued to lack growth momentum. however, the positive effects of recovery in advanced economies have spread to some emerging economies. moreover, as the financial markets have been calm on the whole, a pick - up in domestic demand has been observed in some asian countries. if such developments bis central bankers ’ speeches continue, emerging and commodity - exporting economies should gradually show an improving trend, although a high degree of uncertainty remains. in the world economic outlook released by the international monetary fund ( imf ) in july, the growth rate of the overall global economy for 2014 was revised slightly downward – affected by the deceleration in the january – march quarter – but the projection of the growth rate accelerating toward 2015 remained unchanged. the bank likewise expects that the global economy will moderately increase its growth rate. this is mainly because, as the chinese economy is continuing to see stable growth – albeit at a slightly slower pace – positive effects of the firm recovery in advanced economies will gradually spread to emerging economies. b. japan ’ s economic activity and prices 1. current situation a. economic activity now i will discuss japan ’ s economic activity and prices. the bank ’ s current assessment is that japan ’ s economy has continued to recover moderately as a trend, although the subsequent decline in demand following the front - loaded increase prior to the consumption tax hike has been observed. looking at developments in private consumption since april 2014, despite the decline i just mentioned, many firms have indicated that the degree of the decline has been broadly in line with expectations. in terms of sentiment, the consumer confidence index, which had been relatively weak for some time, has improved for two consecutive months. yet a wide range of indicators should continue to be monitored closely, as the adjustments in some aspects of housing starts and of automobile sales