on february 12 has lowered interest rates both on overnight call money and term instruments. in addition, the markets ’ anxiety about liquidity and credit risks of japanese banks seems to have subsided – this report was written based on data and information available when the bank of japan monetary policy meeting was held on march 12, 1999. the bank ’ s view on recent economic and financial developments, determined by the policy board at the monetary policy meeting held on march 12, as the basis of monetary policy decisions. as reflected in a rapid contraction in the japan premium – partly due to the progress in preparation for public funds injection. meanwhile, the amount outstanding of funds in the call money market has decreased, partly because some institutional investors have shifted a part of their funds from the market to ordinary deposits. the shrinkage of the market has not led to any difficulty in funds settlement. however, close attention should be paid to developments in the flow of funds as unexpected changes may occur. long - term interest rates have, amid nervous market sentiment, declined following the fall in short - term rates. stock prices have turned to be firm against the background of the recent depreciation of the yen and the rise in u. s. stock prices. with regard to corporate finance, credit demand for economic activities such as fixed investment remains weak. firms ’ moves to increase their on - hand liquidity in the face of difficult fund - raising conditions are settling down. meanwhile, private banks have basically retained their cautious lending stance, facing the worsening performance of borrower companies. however, severity in their fund - raising conditions has been alleviated, and their insufficient capital base is about to be increased. under these circumstances, banks continue to actively utilize the credit guarantee system. as a result, the previously tightened credit conditions are easing somewhat. nevertheless, the market is still cautious of credit risk, and thus firms with relatively low credit ratings seem to remain under severe fund - raising conditions. the situation continues to warrant careful monitoring, particularly with regard to how corporate finance develops toward the turn of the fiscal year.

francois groepe : the role of small business in the economy address by mr francois groepe, deputy governor of the south african reserve bank, at the ahi conference on “ the role of business in local government and local economic development ”, organised by the george business chamber, george, 9 october 2015. * * * introduction it is an honour and a great pleasure for me to speak at the ahi conference, not least since i firmly believe that small business plays a critical role in a thriving economy. when viewed through an evolutionary lens, small business can make two indispensable contributions to an economy. firstly, it is an integral part in the renewal process that pervades and defines a market economy as it plays a crucial role in innovation that supports technological change and productivity growth. in the second instance, small business is an essential conduit whereby millions of people enter the economic and social mainstream of a society, and is particularly adapt at creating opportunities for women, immigrants and minority groups. 1 the domestic and global economy current economic conditions and trends to a large extent shape the environment within which business has to function. allow me therefore to highlight a number of key developments that have a bearing on our business environment. ever since the onset of the global financial crisis and the failure of lehman brothers in september 2008, the world economy has been struggling to regain robust growth momentum. advanced economies have generally recorded subdued performance, with activity in the euro area and japan particularly sluggish. this disappointing state of affairs has continued notwithstanding expansionary monetary and fiscal policies. ultra - stimulatory monetary policies, with policy interest rates close to zero, have been sustained in the united states, the united kingdom, the euro area and japan for more than half a decade. financial markets are awaiting the first upward movement in the us policy rate with bated breath and which is likely to be within the next six months. growth in developing economies has been stronger than in advanced economies, as may be expected. china in particular has played an important role to ameliorate the slowdown in the advanced economies ’ growth rate in the aftermath of the global financial crisis, and with its high propensity to invest in commodity - intensive capital projects has lent strong support to commodity markets. recently, however, economic growth in china has started to decelerate while at the same time the composition of domestic expenditure has begun to shift from commodity - intensive investment to less commodity - intensive consumption. this structural shift has acted