financial system report released this april shows profit simulation for the next 10 years. the results suggest that more than half of domestic regional banks are expected to run according to teikoku databank. deficits in 10 years if the borrowing demand of the corporate sector continues to decline at the same pace as in the past. of course, it should be noted that these results need to be interpreted with a latitude as they are calculated based on certain assumptions ( chart 13 ). here, it is worth referring to the case of financial institutions in europe, where a negative interest rate policy has been introduced, as in japan. the financial system report compares financial institutions in europe with those in japan. under a negative interest rate policy, the former have made higher profits than the latter. this is partly because funding costs of financial institutions in europe have decreased against the background that the low interest rate environment has lasted for a shorter period than in japan, and therefore there has been room for a further decline in deposit interest rates. also, in europe, the share of deposit funding to overall financial liabilities is low, and the costs of market financing such as issuing corporate bonds have been declining. moreover, financial institutions in europe have secured various sources of revenue that are unsusceptible to changes in interest rates by, for example, diversifying fees on services ( chart 14 ). for higher profitability going forward, it is hoped that regional financial institutions will set lending rates that reflect risks appropriately, ( 2 ) depart from excessive dependence on deposit - taking and lending activities by, for example, increasing fee - based income, and drastically improve their business efficiency. 14 to push forward with these initiatives strongly and effectively, the use of digital technology, integration or partnering among financial institutions, and alliances with firms outside the financial industry can be effective options. the bank will continue to support these efforts by financial institutions. iv. economic developments in aomori prefecture now, i would like to talk about the economy of aomori prefecture. looking at current developments, economic activity in aomori prefecture has been on a moderate recovery for discussions based on the comparison of financial institutions in japan with those overseas, see hiroshi nakaso, " new frontier of macroprudential policy : addressing financial institutions'low profitability and intensified competition, " speech at the kin'yu konwa kai ( financial discussion meeting ) hosted by the jiji press, november 29, 2017, http : / / www. boj. or. jp / en

register below zero percent. there may be cases, however, that the bank will judge it appropriate to continue with quantitative easing even if these two conditions are fulfilled. the bank considers that this clear commitment is contributing greatly to the appropriate formation of interest rates in financial markets. with regard to strengthening the transmission mechanism of monetary easing effects, the bank has devised various measures including methods related to money market operations, partly with a view to contributing to the development of financial markets from a long - term perspective. as part of this effort, in july 2003, the bank started outright purchases of asset - backed securities ( abss ). in january 2004, the bank amended the terms and conditions for the outright purchases of abss, so that its aim would be achieved more effectively, taking into account the opinions of market participants. the total amount of abss purchased to date has reached around 500 billion yen. the bank has also been hosting a workshop on securitization with market participants to encourage a constructive exchange of opinions to support the development of the abs market. iii. purchases of stocks held by commercial banks the bank started to purchase stocks held by commercial banks from november 2002 to reduce the risk that stock price fluctuations might impact negatively upon the business management of individual financial institutions, potentially resulting in instability of the financial system as a whole. the bank increased the maximum total amount of stock holdings it can purchase from banks to 3 trillion yen from 2 trillion yen in march 2003, and in september 2003 extended the period for purchasing stocks from banks by one year to the end of september 2004. the total amount of stocks purchased by the bank as of march 10, 2004 was 1, 928. 8 billion yen. conclusion in contrast to a year ago, positive signs are steadily increasing in japan ’ s economy. at the same time, however, there remain many tasks in achieving sustainable growth of the economy and overcoming deflation. the bank is also fully aware that there is a disparity in the level of business confidence between large firms and small firms, manufacturers and nonmanufacturers, and metropolitan and other areas. the bank considers it essential that a wide range of economic entities, such as firms, financial institutions, and policymakers, continue to make efforts to revitalize the economy now when a virtuous cycle is starting to work, so that the momentum for recovery spreads throughout japan ’ s economy. the bank will continue to do its utmost to put the economy back on a sustainable growth path and overcome def