international accounting, auditing and disclosure standards and practices for global banking organizations. for example, our chief accountant was the basel committee's lead representative at meetings of the former international accounting standards - setter and is a member of the iasb's standards advisory council, which advises the iasb and its trustees on the iasb's agenda, proposals, and standards. the basel committee has also issued numerous policy papers, surveys, and other releases that address bank transparency, enhanced practices for loan - loss reserves and credit risk disclosure, sound bank internal and external audit programs, and sound risk - disclosure practices. moreover, the basel committee's approach to its new capital accord, with its market - discipline component in pillar 3, signals that sound accounting and disclosure will continue to be important aspects of our supervisory approach for many years to come. many u. s. banking organizations have assumed that international accounting standards are essentially irrelevant to their financial reporting activities. however, the sarbanes - oxley act includes a directive that u. s. accounting standards should seek convergence internationally. in view of this, the fasb and the iasb announced in october 2002 a major agreement to intensify their projects that seek international convergence and harmonization of accounting standards. the sec and the federal reserve strongly support efforts to harmonize international accounting standards in ways that achieve high - quality standards for global firms, including banking organizations. i believe that u. s. banking organizations and their auditors should focus more attention on the initiatives of the iasb in view of these developments and the requirements of the new legislation. in conclusion in conclusion, steps to restore public confidence in the u. s. capital markets have begun, yet the need for a cultural change in the accounting profession, in addition to more regulation, is evident. we have seen all too well that the actions of a few can easily bring down a firm built primarily of good practitioners. although i've been critical of the profession, in many cases the public doesn't look beyond the reputation of our firms, and in some cases individuals, when they evaluate the integrity of the profession. it is, therefore, up to auditors to embrace the professional standards and ethics that have made their attestation function so effective and accepted in the past. a cultural change in the profession today is a prerequisite for an effective principles - based system of standards that can serve to guide us through accounting for new and innovative financial transactions. along with enhanced disclosures based

than the median. this is because i project that it will take some time before households ’ income grows steadily, thereby improving their tolerance of price rises as well as firms ’ price - setting ability, and medium - to long - term inflation expectations will gradually converge to around 2 percent. in the baseline scenario, the bank postponed the timing of reaching around 2 percent inflation by one to two quarters : this was reflected in changing the expression “ in or around fiscal 2015 ” to “ around the first half of fiscal 2016. ” this postponement is consistent with my own repeated claims in the past. however, i submitted a proposal at the monetary policy meeting against the expression “ around the first half of fiscal 2016 ” being used for the baseline scenario and replacing it instead with the expression “ in or around fiscal 2016. ” i bis central bankers ’ speeches considered my suggested expression to be more appropriate for two reasons. first, given that the bank assesses that risks to prices are skewed to the downside, a wider time span to reach around 2 percent seemed appropriate. second, the bank reduced the time span significantly – from one year or more to around six months. this is more likely to reduce the flexibility of monetary policy. here, i would like to make it clear that since the introduction of qqe, i have made all efforts toward achieving the target of around 2 percent at the earliest possible time, without imposing an excessive burden on households and firms. my aforementioned proposal is not in any way contrary to those efforts. it is natural for a central bank to revise its forecasts and delay ( or advance ) the timing to achieve the price stability target in the face of constantly changing domestic and external conditions. it is important that the bank endeavors to realize an economy with around 2 percent inflation by taking into account the sustainability perspective, while revising forecasts with updated information and indicating the timing of achieving the target as a reference. this framework embodies the essence of the “ flexible inflation targeting ” practically adopted by the bank and other major central banks, which i have been emphasizing since the introduction of qqe. moreover, i would like to add that my aforementioned forecasts for prices do not rule out the possibility of achieving the target of around 2 percent over the projection period. thus, my suggested expression was broadly in line with my own forecasts. c. upside and downside risks to economic activity and prices with regard to upside and downside risks to the bank ’ s baseline scenario