people than too many. some argue that only a limited number of people receive the benefits from the economic recovery and that benefits do not reach them. this argument goes that, although income has risen on the whole, many people do not experience much increase in income and income disparities have expanded. let us take a look at how income distribution changed after the introduction of qqe. according to the comprehensive survey of living conditions 2016 released by the ministry of health, labour and welfare, the child poverty rate ( the share of children aged 17 or under living in households with equivalent disposable income at or below 50 percent of the median ) fell from 16. 3 percent in 2012 to 13. 9 percent in 2015. 7 in this same survey, the overall poverty rate fell from 16. 1 percent to 15. 6 percent over this period. there is another argument that qqe has put the banking industry in a difficult situation, saying that low interest rates are squeezing bank profits. but one of the major reasons for such a situation is that banks are suffering from a lack of borrowers. in japan, private nonfinancial corporations as a whole have been experiencing excess net savings, and their currency and deposits accumulated to as much as 254 trillion yen as of end - june 2017. 8 of course, it is natural that bank profits are squeezed if long - term interest rates decline, because banks generally raise short - term funds and invest them in long - term assets. however, if we simply compare long - term interest rates and bank profits, it does not seem appropriate to say that low interest rates always reduce bank profits. chart 6 shows developments in banks'operating profits from core business and long - term interest rates ( 10 - year japanese government bond [ jgb ] yields ). operating profits from core business represent stable earnings of banks, such as profits earned from fund management in the form of lending and securities investment, for example. interest rates have fallen in a mostly consistent manner since 1990, yet i do not believe that this is correlated with banks'operating profits from core business. for example, even though interest rates fell in the first half of the 1990s, operating profits recovered. in 1999, when the zero interest rate policy was introduced, operating profits rose along with interest rates. in 2001, the quantitative easing policy was introduced, yet operating profits rose thereafter. both operating profits and interest rates fell following the termination of quantitative easing, but this is largely due to the 2008 financial crisis.

##e has been exerting its intended effects so far. positive changes have started to be observed in the asset markets and households ’ and firms ’ behavioral patterns. the bank will continue with the qqe, aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. it will examine both upside and downside risks to economic activity and prices, and make adjustments as appropriate. in my view, the criteria for such judgment is that whether various economic entities such as firms and households change their behavioral patterns based on the assumption of a certain level of inflation as i have stated earlier. thank you. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches