the bank provides funds to those financial institutions on favorable terms. the second measure is an ample provision of yen and foreign currency funds. the bank decided to purchase a necessary amount of japanese government bonds ( jgbs ) without limit, with a view to maintaining stability in the bond market and stabilizing the entire yield curve at a low level. it has also decided to provide a large amount of u. s. dollar funds based on cooperation with five other major central banks. the third measure is active purchases of exchange - traded funds ( etfs ) and japan real estate investment trusts ( j - reits ). the aim is to prevent firms'and households'sentiment from deteriorating through volatility in financial markets, thereby supporting positive economic activity. the bank assesses that these three measures have been functioning effectively. specifically, tension in financial markets has eased, although they are still nervous. in addition, despite weakness in financial positions of firms, the environment for external funding, such as bank borrowing and the issuance of cp and corporate bonds, has remained accommodative, partly owing to private financial institutions having actively fulfilled the functioning of financial intermediation. b. quantitative and qualitative monetary easing ( qqe ) with yield curve control while the bank has enhanced monetary easing in light of the impact of covid - 19, as i have just outlined, it has been pursuing powerful monetary easing for more than seven and a half years since the introduction of qqe in 2013. under powerful monetary easing, with a view to achieving the price stability target of 2 percent, the bank has made clear its intention to continue with qqe with yield curve control, as long as it is necessary for maintaining that target in a stable manner. controlling short - and long - term interest rates - - so - called yield curve control - - facilitates the formation of the term structure of interest rates that is most appropriate for achieving the price stability target. specifically, the bank applies a negative interest rate of minus 0. 1 percent to a portion of financial institutions'current account balances at the bank, and purchases jgbs so that 10 - year jgb yields will remain at around 0 percent ( chart 10 ). as a result of resolutely continuing with such powerful monetary easing, japan's economy had continued, up until around 2019, on an expanding trend with a virtuous cycle from income to spending operating. as for prices, the underlying trend in the year -

contributed to foster an environment where it became more difficult for authorities to act promptly when there were signs that the economy was overheating. we all know where this ended up. that is why the g20 mutual assessment process which aims to bring about strong, sustainable and balanced growth and reduce persistent large imbalances, and the g20 discussions on the ims, such as dealing with global capital flows and global liquidity, are interlinked. combined, they are expected to work to enhance the long - term stability of the global economy and financial system. what is important here is that the mutual assessment process will likely be, at least in its initial phase, a process through which countries better understand each others ’ policies and the implications of their domestic policies on other countries. this will become the basis for constructive dialogue aimed at reaching an optimal combination of economic policies across multiple countries. the reform of the ims will also be a long - term project. a caveat here in this global debate is that there will not be any single bis central bankers ’ speeches model or concept applicable to all countries and situations. a thorough analysis, taking into consideration each country ’ s unique situation, both cyclical and structural aspects, will be required. even the imf with its immense amount of expertise and resources has struggled to identify unsustainable imbalances over the years. in 1989, in the article iv discussion for japan, staff noted that inflation in japan was not “ a matter of concern ” and therefore “ no compelling reason ” could be found to tighten monetary policy. in the 2007 article iv staff report for ireland, it explained that “ economic performance remains impressive ” and that “ banks have large exposures to the property market, but stress tests suggest that cushions are adequate to cover a range of shocks. ” the imf staff report for the us in 2007 also presented “ a soft landing ” as the most likely scenario. it also noted that “ financial innovation and stability have underpinned us economic success. ” the limitations of imf surveillance in the run - up to the current global crisis are detailed in the recently published ieo1 report. i am not trying to single out the imf for criticism. nobody was completely successful in recognizing beforehand the emergence of bubbles and the huge negative impact after its collapse. i simply wanted to highlight that when a single approach toward assessing an issue dominates the intellectual climate, it can cloud our judgment in finding emerging risks which could be seen when approached from a different