stable relationship with movements in nominal gdp. this can also be confirmed by applying an econometric technique called “ cointegration analysis ”, which suggests that there is a long - term equilibrium relationship between the two. on the other hand, the relationship between m2 + cds and prices - - which along with real gdp make up nominal gdp - - has changed since the latter half of the 1980s, in the sense that fluctuations in prices have clearly diminished relative to those of m2 + cds. ( 2 ) a relatively stable money demand function can be estimated, based on the above long - term equilibrium relationship and incorporating factors for short - term fluctuations. at least in the sample period, the mechanism of short - term fluctuations has been relatively stable in m2 + cds, gdp, interest rates, and asset factors, as represented by the money demand function. ( 3 ) an analysis in terms of lagged cross correlation on the lead / lag relationships between m2 + cds and other macroeconomic variables reveals that m2 + cds basically leads nominal and real gdp, domestic private demand, and prices. however, there are differences in results across sample periods that cannot be ignored. ( 4 ) similar analyses are conducted, from the standpoints of conclusions ( 1 ) - above, on selected monetary and credit aggregates other than m2 + cds, and on monetary aggregates obtained by partially changing the components of m1 and m2 + cds. the results show that these aggregates did not have more stable relationships with macroeconomic indicators than did m2 + cds. ( 5 ) the above results suggest that, in analyzing monetary aggregates, it would be effective to use the long - term equilibrium relationship between m2 + cds and gdp as well as the money demand function incorporating the relationship. in interpreting the empirical results using the statistical techniques, however, it is necessary to bear in mind the following limitations : ( a ) long - term equilibrium relationships indicate only the average relationship in the long run, and hence considerable deviations from equilibrium values may arise in the short term ; and ( b ) there still remains a possibility that the long - term equilibrium relationships or money demand functions derived from the previously observed data may change, as a result of a large shift of funds caused by deregulation and other structural changes in the financial markets in the future. checklist for the year 2000 problem introduction the bank supervision department of the bank of japan compiled the following checklist ( the original is in japanese ) to assist bank examiners in assessing the adequacy

of financial institutions ’ risk management framework for addressing the year 2000 problem ( hereinafter simply “ the problem ” ). 1 on august 19, 1997, the checklist was also distributed to financial institutions to help them in their own evaluation of their action plans. the checklist emphasizes the significance of each financial institution ’ s understanding and awareness of the problem, and calls for the commitment of each institution, including the top management, to its action plans. in proceeding with the action plans, each institution is advised to fully assess the effects of the problem, carefully arrange the scheduling of the plans, and complete renovation and testing prior to the implementation of the action plans. the checklist also stresses the importance of other matters including ( 1 ) the monitoring of the progress as to the implementation of the action plans, ( 2 ) the scrutiny of legal responsibilities of outside vendors, and ( 3 ) the establishment of contingency plans. 1 many computer operating systems and applications use six - digit codes for dates - - date fields - - comprising two digits for the year, two digits for the month, and two digits for the day ( for example, december 31, 1999 reads 991231 ). with such a coding system, the code for the year 2000 will be “ 00, ” which may be interpreted as the year 1900, not 2000. this will cause errors in date - sensitive calculations and other issues. such problems are referred to as the year 2000 problem. if measures are not taken to address the problem, normal operations of financial institutions will be disrupted, which would lead to disturbances in payment and settlement systems nationwide, the effects of which may spread to other industries. * * * nb this review is available on the bis worldwide web site ( http : / / www. bis. org ) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _