moreover, the number of foreign tourists visiting japan is only 10 percent compared with that visiting france, the united states, and china, and it ranks around 30th in the world, which is lower than korea and singapore. depending on the ambition and creativity to open up the country, japan seems to have room for capturing global demand and growing. innovation in the areas of resources and energy second, to make a leap in technology and know - how to enhance resource and energy efficiency. as i mentioned earlier, it seems to be tight supply and demand condition of resources, energy and food that may become a major constraint for the global economy to continue to grow strongly, especially in emerging countries, while avoiding inflation. innovations including energy saving will contribute not only to a near - term domestic electricity shortage but also to medium - to long - term global economic growth. bis central bankers ’ speeches tapping domestic potential demand third, there appears to be plenty of unexplored need in the domestic markets where the demographic vortex and maturation are progressing, such as medical and nursing care as well as other areas. it is said more than often that japan is already affluent and consumers do not want anything more. arguably, if we look only at the existing goods and services, not a few of them might have already reached saturation point. even so, in terms of people ’ s potential desire, a desire to enjoy life more or to live a more comfortable life will not disappear. it is the real entrepreneurship to strategically tap potential demand that even consumers themselves are not aware of. incidentally, the generation which is in the prime will peak out within 10 years in some asian countries such as china and korea, and aging will progress following the path of japan. if japan, as a country that faces the challenge ahead of other countries, is able to build a vigorous economy under aging, it could serve as a good role - model for other countries that will be faced with aging at a later stage. strengthening financial power to provide risk money fourth, roles which finance plays. firms ’ aspiring approaches in tapping new demand do not necessarily succeed. to put it another way, challenging things that might fail will lead to exploring a chance of growth. namely, a certain amount of risk is associated with growth and it is a role of finance to provide risk money to support the growth. therefore, in order to enhance the medium - to long - term growth potential of the economy, it is necessary to reinforce the role of finance. in sum, japan

growth in the markets for securitised assets and for credit derivatives, and the emergence of new disciplines in risk management - such as operational risk management - have changed the ways that banks measure and manage their risks. as risk management practices become more sophisticated, the static and very simple rules of the 1988 accord are becoming less relevant to the most sophisticated and complex banking businesses. therefore, in the mid - 1990s, the basel committee agreed that it was time to develop a new framework for capital. our goal was to develop a new approach that would be more sensitive to the actual risks that banks take on and that would ensure a level playing field for banks that compete globally. rather than simply resetting the quantitative standards, we sought a framework that would be better able to evolve with, and indeed encourage, future improvements in the measurement and management of risk, and one that would be well - anchored on a solid corporate governance structure and a sound risk culture. on a grand scale, we sought a capital framework that would promote greater financial stability, a public good that benefits consumers, businesses and banks alike. comprehensive approach the new capital framework is much more comprehensive than the 1988 accord for many reasons : it applies to a wider scope of entities within banking groups ; it offers a menu of different alternatives to fit different circumstances ; it encompasses additional risks, in particular operational risk ; it widens the recognition of credit risk mitigation techniques ; it sets out a thorough framework for securitisation transactions ; and, most importantly, it is based on three mutually reinforcing pillars. as you may know, the first pillar refines the measures of minimum capital requirements. it aligns capital charges more closely and comprehensively to the actual economic risks a bank faces, and creates explicit incentives for banks to improve their internal measures and approaches to risk. let me just add that this better alignment of capital to risk is a principle that we supervisors hold dear. it can sometimes be tempting to vary the capital rules in favour of particular sectors, but in my view this divorces capital requirements from risk, which ultimately benefits no one. it does not stimulate a culture of appropriate risk management, may lead to an inefficient allocation of resources in the economy and does not, therefore, promote stability. “ pillar 2 ” reminds bank managers that ultimately they are responsible for the adequate capitalisation of their institutions, and creates an incentive for banks to conduct their internal reviews carefully and responsibly, on the basis of a well -